The U.S. government just increased conforming loan limits for all loan types. What does this mean for homebuyers?
Each year the government sets maximum loan amounts for conventional, FHA, and VA loans. The loan limit for conventional and VA loans is now $510,400. In other words, all conventional loans for that amount or less can be secured for a minimum of 5% down. If you go above that amount, your loan turns into a jumbo loan, which requires other additional rules for your down payment.
“Each year the government sets maximum loan amounts for conventional, FHA, and VA loans.”
VA loans don’t require a down payment for any loan size, but if your VA loan is above the limit, it becomes a VA high balance loan. Some lenders may impose additional guidelines for these types of loans, so check with your lender to see what their rules are. Also, they may price these loans differently—there might be more attention paid to the borrower’s credit score, debt-to-income ratio, etc.
The rules are slightly different for FHA loans. In this case, the loan limits are set by the county. Here in Bexar County, the loan limit for FHA loans is $393,300. Some county loan limits in Texas will be higher, others will be lower. It’s important to stay up to date on your county’s limit if you plan on purchasing a home with an FHA loan.
As always, if you have questions about this or any other loan topic, don’t hesitate to give me a call. It doesn’t cost a penny to talk.