Beginning next year, Fannie Mae and Freddie Mac will begin backing mortgages up to $726,200 in most parts of the country next year, while also being able to cover loans exceeding $1 million in high-cost counties.
The move comes via the the Federal Housing Finance Agency, which announced the conforming loan limit values increase of $79,000 from this year.
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. The Housing and Economic Recovery Act establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit.
Those California areas falling within the high-cost counties include nearly all of coastal SoCal and the Bay Area.
Median home values generally increased in high-cost areas in 2022, which increased their conforming loan limit. The new ceiling loan limit will be $1,089,300, which is 150 percent of $726,200.