Good News! Loan Limits INCREASED for 2021

Hot off the press: The Federal Housing & Finance Agency is increasing the Conforming Loan Limits for 2021, and the FHA will likely follow. For buyers, this means more loan options (and more house!) with a reasonable down payment. For REALTORS® this means you’ll be able to better help your buyer pool in a market where demand is high and supply is low. Listen in as I break down the new loan limit numbers, what they mean for conforming and jumbo loans, and how to distinguish between FHFA & FHA loans —and hear why having a loan professional you can trust is paramount to getting the best loan possible.

Please subscribe to “Real Estate from the Rooftops” in Apple Podcast, or your favorite Podcast App, and on Youtube and Rumble—and never miss a beat from Leigh by following her on Instagram @LeighThomasBrown. As always, if you need a rockstar REALTOR® who is involved in political advocacy, homeownership rights, and is always in the know, call on this girl at [e-mail]. 

Time Stamped Show Notes:

• Big News: The Federal Housing & Finance Agency is changing the Conforming Loan Limits for 2021
• What does this impact?
• When loan limits increase, it means you can buy more house with a reasonable down payment and the loan is backed by the FHFA (Fannie Mae & Freddie Mac)
• The new Maximum Conforming Loan Limit for a single unit property is $548,250 from this year’s $510,400
• You can now do a 5% down payment on a purchase up to $577,100
• You don’t have to have 20% down, there are amazing loan options at 5% down; talk to your REALTOR® and loan professional to learn more about your options
• I’m getting the inside scoop from Brian Floyd, my preferred lender who’s a pro and gives personalized advice
• Information on jumbo loans
• Jumbo loans are loans for amounts larger than the conforming loan limit and the pricing number is different
• These are for luxury homes; you’ll need a higher credit score (720 and up) 
• If your credit score is less, you can do a 5% down conventional but will have lower loan limits
• Jumbo loans typically require 20% down, sometimes 10%; there are some 0% doctor loans, but you’ll need reserves, great income, and great income verification
• Underwriting for jumbo loans typically takes a little longer to confirm everything 
• Other loans: Sandwich loans, stacker loans, combo loans, 90-10-10, 80-10-10; all these have adjustments on pricing and a second underwriting
• Have a loan professional you can trust; there’s a lot to consider
• Announcement coming in December: FHA loan limits are likely going to increase, too, to $356,362 (they typically follow FHFA)
• Information on the FHA loans
• It’s 3.5% down, your credit score can be a bit lower, and your debt-to-income ratio can be higher, giving you more opportunities as a buyer
• If your credit score has taken a hit, ask your REALTOR® and loan professional how to boost it
• People with FHA loans get an extra inspection because the bank has more at risk; there could be some non-negotiable repairs
• FHA folks look for paint peeling, operating windows, handrails for 3 or more steps, and other safety precautions 
• FHA loans serve an important part of the marketplace; buyers will have more loan options and REALTORS® will be able to better help their buyer pool

3 Key Points

1. There are great loans with 5% down. Talk to your REALTOR®!
2. Get a loan professional you can trust.
3. FHA loans are not of the devil!