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Fannie Mae, Freddie Mac will soon pay back their home mortgages worth nearly $1 million

Fannie Mae and Freddie Mac will soon offer guarantees on nearly $1 million in mortgages, due to the sharp rise in home prices over the past year.

On Tuesday, the Federal Housing Finance Agency released an analysis of the appropriate loan limits for 2022. Here are the maximum allowable mortgages that can be backed by Fannie Mae
FNMA,
+ 8.73%

and Freddie Mac
FMCC,
+ 8.94%

– larger home loans would be considered jumbo loans, typically portfolio loans or privately securitized.

Across the country, the base 2022 limit on loans for single-family homes supported by Fannie and Freddie will be $647,200, up nearly $100,000 from 2021. New limits Officially effective January 1st.

The FHFA bases its growth on data collected from their Home Price Index, which shows an average 18.05% increase in home prices nationally between the third quarter of 2020 and 2021.

In the high-priced housing market, Fannie and Freddie were allowed to assist with larger mortgages. By law, the cap for high-cost areas is set at 150% of the base limit, meaning that in some markets the mortgage giants can support loans up to $970,800 dollars.

Eligible loan limits vary from county to county. According to the FHFA, only four counties across the country did not increase their loan limits – reflecting the extent of widespread home price growth over the past year. By law, the loan limits set forth by the FHFA cannot be reduced, even in the event of a drop in house prices.

New data shows that the pace of home price growth has begun to slow. September was the first month since May 2020, in which the annual rate of home price growth slowed, according to latest version of the S&P CoreLogic Case-Shiller Home Price Index. And data from Realtor.com shows listing prices have fallen year-over-year in 17 of the nation’s 50 largest metropolitan areas, reflecting an increasing number of homeowners putting homes for sale.

Source link Fannie Mae, Freddie Mac will soon pay back their home mortgages worth nearly $1 million

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