The general loan limits for 2018 have increased and apply to loans delivered to Fannie Mae in 2018

Written by Michael A. Foote, CMB on . Posted in Uncategorized

Even for loans already originated for funding after January 1st, 2018!

The Federal Housing Finance Agency (FHFA) has issued the maximum loan limits that will apply to conventional loans to be acquired by Fannie Mae in 2018. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits. The limits are increasing in 2018. First Mortgage Loan Limits The following chart contains the general loan limits for 2018: Units General Loan Limits Contiguous States, District of Columbia, and Puerto Rico Alaska, Guam, Hawaii, and U.S. Virgin Islands One $453,100 $679,650 Two $580,150 $870,225 Three $701,250 $1,051,875 Four $871,450 $1,307,175 The high-cost area loan limits are established for each county (or equivalent) and are published on Fannie Mae’s website and on FHFA’s website. The maximum limits for 2018 are: Units High-Cost Area Loan Limits Contiguous States, District of Columbia, and Puerto Rico* Alaska, Guam, Hawaii, and U.S. Virgin Islands One $679,650 $1,019,475 Two $870,225 $1,305,325 Three $1,051,875 $1,577,800 Four $1,307,175 $1,960,750 * A number of states and Puerto Rico do not have any high-cost areas in 2018. High-cost area loan limits are derived from median home prices estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD). FHA will permit a 30-day appeals period during which requests for individual area median home price increases will be evaluated. FHFA will issue a subsequent announcement if any individual high-cost area loan limit is increased as a result of the appeals process. Updates resulting from subsequent FHFA announcements will be posted on Fannie Mae’s website. Loans subject to the high-cost area limits are referred to as high-balance loans and must comply with the high-balance loan requirements described in the Selling Guide. © 2017 Fannie Mae. Trademarks of Fannie Mae. 11/28/2017 2 of 2 Second Mortgage Loan Limits The loan limit for second mortgage loans for 2018 is $226,550 (or $339,825 in Alaska, Guam, Hawaii, and the Virgin Islands). As stated in the Selling Guide, lenders must obtain approval from Fannie Mae to sell or service second mortgages. Fannie Mae is not currently acquiring second mortgages. Application of the Limits Based on Original Loan Amount All of the loan limits apply to the original loan amount of the mortgage loan, not to its balance at the time of purchase by Fannie Mae. Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located.

Effective Date The new limits are effective for whole loans delivered, and mortgage loans delivered into MBS with pool issue dates, on or after January 1, 2018. Whole loans delivered up through December 31, 2017, must comply with the 2017 limits. MBS pools with December 1, 2017 pool issue dates must comply with the 2017 limits, and MBS pools with January 1, 2018 pool issue dates must comply with the 2018 limits (even if delivered in December). Lenders must ensure the appropriate identification of highbalance loans at delivery using Special Feature Code 808. Desktop Underwriter® Implementation The 2018 loan limits will be applied to Desktop Underwriter (DU®) Version 10.0 and Version 10.1 loan casefiles submitted (or resubmitted) on or after the weekend of December 9, 2017. Also note that loan casefiles underwritten through DU prior to December 9 that receive an Ineligible recommendation due only to exceeding the 2017 loan limit may be delivered after January 1, 2018 (or in January 1, 2018 MBS pools). The loan casefile does not have to be resubmitted to DU if the loan amount complies with the applicable 2018 loan limit. Reference Materials To assist lenders in determining the applicable limits, we post reference material on the Fannie Mae website, including the Loan Limit GeoCoder™, which lenders can use to look up loan limits based on a specific address (or batch of addresses).

 

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