Loan Limits for 2018 Set to Increase

Recently, an announcement from Fannie Mae came in the form of Lender Letter LL-2017-10. This letter confirmed that both the general and the high-cost area loan limits will be increasing. The letter announced by the FHFA (Federal Housing Finance Agency) showed new loan limits for most of the country going up to $453,100. This is a 6.8% increase compared to the 2017 limits and will impact all the counties in the United States except 71 counties/parishes.

The new limits will take effect on January 1st, 2018. They will have an effect on any whole loans from Fannie Mae and any loans in the MBS pools that will be issued on or after the first of the year.

New Loan Limits for 2018

The loan limits are based on the size of property and the area where the property is located. New loan limits for 2018 which will apply to Louisiana are as follows:

• One Unit – $453,100
• Two Unit – $580,150
• Three Unit – $701,250
• Four Unit – $871,450

For High-Cost Areas, the loan limits are:

• One Unit – $679,650
• Two Unit – $870,255
• Three Unit – $1,051,875
• Four Unit – $1,307,175

What does this mean for Home Buyers?

The loan limit increase is significant because it’s a rather large increase compared to last year’s increase. This means any loans meeting the underwriting guidelines of Fannie Mae will be able to be higher. It gives home buyers a bit more buying power and makes it a little easier to get a conforming loan when buying a home in New Orleans.

The loan limit increase is necessary since the cost of homes is on the rise. Buyers need to be able to borrow enough money to buy a home, especially those in lower income brackets looking to use FHA mortgages. In addition, this increase will help first-time home buyers get the money they need to buy a new home in 2018.

If you’ve been thinking about buying a home, but not sure if it was the right time, 2018 may be the year for you. Contact your local real estate agent and a lender to find out how these new loan limits might make it easier for you to buy a home in 2018.