In response to rising home prices across the country, federal housing officials increased the conforming loan limits for California and elsewhere in the U.S.
Most counties within California have a 2019 conforming loan limit of $484,350, for a single-family home. Higher-priced areas, like those in the San Francisco Bay Area and Los Angeles, have conventional limits of up to $726,525 due to higher home values. In San Diego, the conforming loan limit is $690,000 for a single-family home.
California Home Loan Limits for Single Family Homes in 2019 vs 2018
Map of Home Loan Limits by County
Look up your county limits here
C.A.R. commends the FHFA for recognizing California’s robust home price increases over the last few years and raising maximum conforming loan limits, which will give tens of thousands of California homebuyers a chance at homeownership” said C.A.R. President Jared Martin. “Increasing the existing Fannie Mae and Freddie Mac conforming loan limits will greatly benefit higher-priced areas of the state and provide stability and certainty to the housing market.”
Loan Limit Terminology for Borrowers
Not sure what these terms mean? Here’s a mini glossary of loan limit terminology courtesy of http://www.loanlimits.org
A California “conforming” home loan is one that falls within the maximum size limits used by Fannie Mae and Freddie Mac. These caps are established by the Federal Housing Finance Agency (FHFA). In short, if a California home loan falls within these conforming limits, it can be sold to Freddie and Fannie via the secondary mortgage market. Anything larger is considered a jumbo loan and cannot be sold into the secondary market. These limits vary by county, as shown in the table above.
The term “conventional” is used to describe mortgage products that are not insured by the government. This distinguishes them from FHA and VA loans, which are insured or guaranteed by the federal government. California conventional home loans are originated (and sometimes insured) within the private sector, with no government backing.
This is the maximum borrowing amount within a certain mortgage loan category. For instance, the maximum amount for a conforming single-family home loan in San Diego County is $690,000. There are caps for other products as well, including FHA and VA mortgage programs. They also vary by county and are based on median home prices.
Home Loan Limits for 2019 and the Impact on Real Estate
Home Loan Limits are just one part of the real estate purchase puzzle. The best way to understand your top buying options (and find the perfect home for your budget) is to meet in person with an expert. Or at least schedule a phone call. There is a lot of information online, but everyone is in a unique situation. Please feel free to reach out to me or anyone on our team. We would be happy to answer and real estate or mortgage questions you have.