The Federal Housing Finance Agency has announced that for 2017 it will raise the maximum size of the super conforming loan limit to $636,150. This amount is adjusted from the super conforming limit which affects 238 counties nationwide of $625,500. The super conforming limit affects the 5 boroughs of New York City as well as many other metropolitan areas with high real estate valued markets. In the rest of the country the conforming limit will be increased from $417,000 to $424,100.
Conforming loans are what is considered best loans for borrowers. The reason why it is considered this is because the loans generally have the lowest possible interest rates and the requirements for qualifying for such loans are smaller than other loans. Loans above the conforming limits generally have more requirements and conditions for a borrower to qualify for these “jumbo” loans. Conforming loans are also easier to sell to Fannie Mae and Freddie Mac which gives the banks the ability to lend more easily.
The change to the conforming limit could expand access to additional buyers. It is estimated that this increase could result in 40,000 additional sales nationwide. This is the first time that the Federal Housing Finance Agency has increased the conforming loan limit since 2006. For more information please see National Association of Realtor’s article here.
We here at Blue Harbour Property Management have been predicting that loan limits would increase for some time. With this news, we also believe that investors will have the ability to borrow and purchase properties that might have been out of their reach in the past. It can only affect property management companies in New York City in a positive light.