Conforming Mortgage Loan Limits Rising

For 2022, the standard conforming limit for single-unit properties is $647,200, up nearly $100,000 from the 2021 cap.

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The steep rise in home prices nationwide has caused a significant jump in how much you can borrow with a conforming loan—that is, a mortgage that meets guidelines set by government-backed institutions Fannie Mae and Freddie Mac. For 2022, the standard conforming limit for single-unit properties is $647,200, an increase of nearly $100,000 from the 2021 cap. In areas with a high cost of living, the loan limits are higher—as much as $970,800 for single-unit homes in places including Alaska, Hawaii, Washington, D.C., and certain counties in California, Maryland, New Jersey, New York and Virginia.

Conforming loans are the most common type of mortgage, and they often have lower interest rates than other loans. To borrow more than the conforming limit, you must qualify for a jumbo loan, which usually has a higher rate and stricter underwriting requirements. You may be able to get a conforming loan with a credit score as low as 620, and a 740 or higher score can get you the best rates. Jumbos may not be available to borrowers with credit scores below the mid-to-upper 600s, and you’ll need a credit score of at least 760 for the best rates, says Keith Gumbinger, vice president of mortgage research site HSH.com (opens in new tab). A conforming loan may have a loan-to-value ratio (the amount borrowed expressed as a percentage of the property’s value) of up to 95%, while a jumbo loan’s LTV usually can’t surpass 80%, says Gumbinger.

If you have a jumbo loan that now falls within the conforming limit, refinancing may be worthwhile if it lowers your interest rate. Using this online calculator (opens in new tab), enter information about your current mortgage and potential new mortgage to see how much your monthly payment would change and the net savings or cost over the life of the new loan.

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Lisa Gerstner
Contributing Editor, Kiplinger's Personal Finance

Lisa has spent 15 years with Kiplinger’s Personal Finance and heads up the magazine’s annual rankings of the best banks, best rewards credit cards, and financial-services firms with the best customer service. She reports on a variety of other topics, too, from retirement to health care to money concerns for millennials. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.