Becoming a Homeowner

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.

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. 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, 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.

Most Popular

15 Stocks Warren Buffett Is Buying (And 7 He's Selling)
stocks

15 Stocks Warren Buffett Is Buying (And 7 He's Selling)

Berkshire Hathaway CEO Warren Buffett is a bull once more! The Oracle and his team entered eight new positions and added to others in a big way.
May 17, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is heading back toward its March highs. What’s driving the resurgence, and will gas prices go down anytime soon?
May 5, 2022

Recommended

The 25 Cheapest U.S. Cities to Live In
places to live

The 25 Cheapest U.S. Cities to Live In

Take a look at our list of American cities with the lowest costs of living. Is one of the cheapest cities in the U.S. right for you?
April 28, 2022
The 2022 Real Estate Market with Daniel Bortz
Becoming a Homeowner

The 2022 Real Estate Market with Daniel Bortz

Daniel Bortz doesn’t just write about home sales and housing prices – he’s been in the business. He’ll share insights about the real estate outlook fo…
March 23, 2022
13 Tax Breaks for Homeowners and Home Buyers
Tax Breaks

13 Tax Breaks for Homeowners and Home Buyers

Owning (or buying) a home is expensive. But at least there are some tax deductions, credits, and exclusions that can help you recoup some of those cos…
March 12, 2022
Home Sale Prices in the 50 Largest Metro Areas
Becoming a Homeowner

Home Sale Prices in the 50 Largest Metro Areas

What’s happening in the market where you live?
February 25, 2022