In what has become a familiar fall ritual, mortgage lenders are increasing their conforming loan limits months ahead of the FHFA’s official announcement. On Friday, Pennymac joined Rocket Pro TPO in announcing an increase in their conforming loan limit to $802,650 — before the expected increase by the FHFA in November. Pennymac’s increase will be effective for new broker locks on Monday, Sept. 16.
“Pennymac is always looking for opportunities to help our partners and their referral partners grow their business and stay competitive. Our capital position gives us the ability to support these increased loan amounts ahead of agency support,” said Kim Nichols, chief TPO production officer and senior managing director at Pennymac.
Alaska and Hawaii continue to get a bigger increase under the lender’s new guidelines, with a new loan limit of $1,203,975. FHFA’s conforming loan limits for 2024 are $766,550 for the lower 48 and $1,149,825 for Alaska and Hawaii. The new threshold announced by Pennymac is a 4.71% increase over this year. The FHFA will not announce its official conforming loan limit for 2025 until November.
In 2008, as a result of the great financial crisis, the Housing and Economic Recovery Act (HERA) established a formula which mandated that the conforming loan limit could only rise after home prices returned to pre-recession levels. That condition was finally met in 2016 when the FHFA increased the conforming limits for the first time in a decade.
Here are the increases in FHFA’s conforming loan limit for one-unit loans for the lower 48 states since 2016.
- 2016: $417,000
- 2017: $424,100 — 1.7% increase
- 2018: $453,100 — 6.8% increase
- 2019: $484,350 — 6.8% increase
- 2020: $510,400 — 5.3% increase
- 2021: $548,250 — 7.4% increase
- 2022: $647,200 — 18% increase
- 2023: $726,200 — 12.2% increase
- 2024: $766,550 — 5.5% increase
The conforming loan limit has increased 50.1% since 2020, mirroring the sharp increase in home prices in the aftermath of the pandemic.