Fannie, Freddie to Buy Mortgages up to $1M
Government support will make loans on mortgages for more expensive homes cheaper and more accessible.
According to The Real Deal, Fannie Mae and Freddie Mac will increase loan limits in the coming weeks, making it easier for buyers of more expensive homes to get mortgages. The Wall Street Journal reports that the conforming loan limit is expected to rise to a baseline of $650,000 and to nearly $1 million in high-cost markets. The current conforming loan limits for single-family homes are $548,250 and $822,375, respectively.
The exact loan limits are expected to be announced on Nov. 30 before going into effect at the start of 2022. The increase of loan limits should make it easier and cheaper for buyers to secure a mortgage for amounts just above the current limit of what Fannie and Freddie will buy. Lenders are very willing to make loans that they know can be sold to the government-sponsored entities, and tend to charge lower interest rates and not demand high down payments for them.