Loan limits expand in 2022
With historical home price appreciation defining the past year, mortgage limits are growing for 2022.
Qualified borrowers will be able to take out larger loans backed by the government-sponsored enterprises — Fannie Mae and Freddie Mac — the Federal Housing Administration, and Department of Veterans Affairs.
For single-family home buying in 2022, you can borrow up to these limits in most areas of the U.S.:
- Conventional loan – $647,200
- FHA loan – $420,680
- VA loan – No loan limit
However, you may have the opportunity to borrow more if you live in a medium– to high–cost locale. In these areas, 2022 conforming and FHA loan limits are close to $1 million.
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Conventional loan limits for 2022
The Federal Housing Finance Agency (FHFA) announced the maximum conforming loan limits for all mortgages acquired by Fannie Mae and Freddie Mac in 2022.
For reference, over 60% of home purchase loans are conventional mortgages, so these loan limits apply to most U.S. home buyers.
| Low-Cost Area | Medium-Cost Area | High-Cost Area | |
| 1 Unit | $647,200 | $647,201-$970,799 | $970,800 |
| 2 Units | $828,700 | $828,701-$1,243,049 | $1,243,050 |
| 3 Units | $1,001,650 | $1,001,651-$1,502,474 | $1,502,475 |
| 4 Units | $1,244,850 | $1,244,851-$1,867,274 | $1,867,275 |
The max conventional loan limit for one-unit properties in 2022 stretched to $647,200 for the majority of the country. That’s a jump of $98,950 or about 18% over 2021’s $548,250.
Loan limits on multi-unit residences received similar increases. Two-unit homes rose to $828,700; three-units to $1,001,650; and four-units to $1,244,850.
Though limits vary by geography and have taller ceilings in medium- and high-cost areas.
“The conventional conforming limit will be the same everywhere whereas high balance differs from county to county,” said Jonathon Meyer, The Mortgage Reports loan expert and licensed MLO.
“Generally, conventional conforming rates will always have the best pricing. For people who purchased this year before the changes and had to obtain a high balance loan, they may want to consider contacting a lender to see if they can secure a lower rate.”
Markets like Kings County, New York and Orange County, California have median home values exceeding 115% of the baseline loan limit and are privy to the higher conforming loan limits.
Alaska, Hawaii, Guam, and the U.S. Virgin Islands have their own set of loan rules and will have a baseline limit of $970,800 on one-unit properties for 2022.
>Related: Check conforming loan rates and requirements
FHA loan limits for 2022
The FHA, aimed at helping borrowers with moderate incomes and credit scores, also upped its loan limits for 2022.
| Low-Cost Area | Medium-Cost Area | High-Cost Area | |
| 1 Unit | $420,680 | $420,681-$970,799 | $970,800 |
| 2 Units | $538,650 | $538,651-$1,243,049 | $1,243,050 |
| 3 Units | $651,050 | $651,051-$1,502,474 | $1,502,475 |
| 4 Units | $809,150 | $809,151-$1,867,274 | $1,867,275 |
In 2022, you can get an FHA–insured mortgage up to $420,680 for a one-unit property — or up to $970,800 in particularly expensive areas.
For a two-unit home, the standard FHA mortgage limit is $538,650; for a three-unit home, it’s $651,050; and $809,150 is the cap for a four-unit home.
Just like with conforming mortgages, the limits depend on location, differing for low, medium, and high-cost counties.
Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have their own limits set higher due to elevated costs of construction. In those four places, the 2022 baselines are $1,456,200 for one-units; $1,864,575 for two-units; $2,253,700 for three-units; and $2,800,900 for four-units.
>Related: Check our FHA loan guide
VA loan limits don’t exist in 2022
In 2020, the U.S. Department of Veteran Affairs removed the maximum loan amount it would grant its borrowers. Eligibility includes veterans, active–duty service members, National Guard members, reservists, and surviving spouses.
VA loans also come with the benefits of no required down payment or mortgage insurance and the lowest interest rates on the market.
VA loans have an upfront funding fee, which most borrowers will roll into the mortgage closing costs. Those fees carried over from 2021 to 2022 as follows:
| Down Payment | First-Time Use | Subsequent Uses |
| None | 2.3% of loan | 3.6% of loan |
| 5% or more | 1.65% of loan | 1.65% of loan |
| 10% or more | 1.4% of loan | 1.4% of loan |
>Related: Check our VA loan guide
Why have the 2022 loan limits increased and is that a good thing?
The Housing and Economic Recovery Act — established in 2008 following the subprime mortgage crisis — requires the baseline loan limits to be adjusted each year based on the average U.S. home price, according to the FHFA.
The FHFA’s House Price Index shot up 18.05% annually in the third quarter of 2021 so the conforming loan limit increased by the same amount.
This is a positive development for consumers since expanding loan limits provides a higher amount to borrow and, ultimately, more homes they can potentially afford on the market.
“If loan limits were not allowed to increase every year to keep up with home prices, first-time and moderate-income home buyers would not have access to affordable mortgage capital, which reduces homeownership opportunities for those who need it the most,” according to 2022 California Association of Realtors President Otto Catrina.
See what loan types you qualify for and which gives you the best value, along with the latest mortgage rates here:
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