New Conforming Price Adjustments for Mortgage Rates

UPDATE: DECEMBER 23, 2013: Incoming Director of the FHFA, Mel Watts has announced that he will delay the increase to conforming price adjustments (aka LLPA or guarantee fees).

This week Fannie Mae revealed conforming price adjustments (LLPA) which will increase the cost for mortgage rates in 2014. This complied with the Fed beginning to pull back on their bond buying program will certainly cause mortgage rates to trend higher.

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Reduction to 2014 Conforming Loan Limits May Be Delayed

Edward DeMarco, Acting Director of the FHFA, pretty much confirmed that we can anticipate lower conforming loan limits next year. This is from his prepared remarks for “Getting Our House in Order”:

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Conforming Loan Limits may go DOWN in 2014

iStock_000015167058XSmallThere’s been a lot of recent chatter about the possibility of conforming loan limits being reduced in 2014 that home buyers in the greater Seattle area and home owners should be aware of.

Reuters reports that Denise Dunckel, a spokes person for the FHFA recently stated “a gradual reduction in loan limits is an appropriate and effective approach to reducing taxpayer’s mortgage risk exposure”.

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2013 Conforming Loan Limits for Washington State Mortgages

The Federal Housing Financing Agency (FHFA) who oversees Fannie Mae and Freddie Mac, confirmed that conforming limits for 2013 will be unchanged from 2012. This means that a single family 1-unit residence in the greater Seattle area has a conforming loan limit of $506,000. Loan amounts above conforming limits are considered “jumbo” or non-conforming.

Four counties in Washington continue to have “high balance” loan limits above the “general” loan limits:

King County, Snohomish County and Pierce County:

1 Unit: $506,000
2 Unit: $647,750
3 Unit: $783,000
4 Unit: $973,100

San Juan County:

1 Unit: $483,000
2 Unit: $618,300
3 Unit: $747,400
4 Unit: $928,850

The remaining Washington counties have “general” loan limits:

Adams, Asotin, Benton, Chelan, Clallam, Clark, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Jefferson, Kitsap, Kittatas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit, Skamania, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima Counties:

1 Unit: $417,000
2 Unit: $533,850
3 Unit: $645,300
4 Unit: $801,950

2012 Conforming Loan Limits for Washington State Homes

Congress decided to keep the 2012 Conforming Limits at the existing 2008 levels instead of reverting to the higher “temporary” limits that we’ve experienced the past couple of years**.  In their infinite wisdom, Congress did restore the higher loan limits to FHA insured loans.  This means that in order to not have a jumbo loan in the greater Seattle area, your loan amount will need to be $506,000 and lower for conventional or $567,500 or lower for FHA insured mortgages.  I’ll be officially posting FHA insured loan limits soon.  

Four counties in Washington continue to have “high balance” loan limits above the “general” loan limits:

King County, Snohomish County and Pierce County:

  • 1 Unit: $506,000
  • 2 Unit: $647,750
  • 3 Unit: $783,000
  • 4 Unit: $973,100

San Juan County:

  • 1 Unit: $483,000
  • 2 Unit: $618,300
  • 3 Unit: $747,400
  • 4 Unit: $928,850

The remaining Washington counties have “general” loan limits:

Adams, Asotin, Bention, Chelan, Clallam, Clark, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Jefferson, Kitsap, Kittatas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit, Skamania, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima Counties:

  • 1 Unit: $417,000
  • 2 Unit: $533,850
  • 3 Unit: $645,300
  • 4 Unit: $801,950 

Loan amounts above the figures listed above are considered “jumbo” or “non-conforming”. 

**NOTE: Congress DID increase loan limits in one county in Connecticut for 2012.