Conforming mortgage limit jumps 14% for Essex County
Late last year, in the midst of the annual turkey celebration, the Federal Housing and Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, announced the new conforming loan mortgage limits for 2019. The conforming loan limit is the maximum mortgage size that Fannie and Freddie are allowed to purchase. Freddie and Fannie are the two government-sponsored enterprises (GSEs) that purchase mortgages, bundle and securitize them, and then sell them to investors through Wall Street and other channels.
Loans above the conforming limit are jumbo mortgages.
For 2019 the conforming limit for most of the country increases 6.9% (the amount the FHFA index of home prices increased from Q3 2017 to Q3 2018), raising the new ceiling to $484,350.
But in Essex County, one of the “higher-cost areas”, the limit jumped a whopping 14% to $688,850.
While most articles about mortgage affordability focus on how little one can put down – e.g. 3% – I would like to suggest a different approach. With the new limit of $688,850 a buyer could buy a $1 million house with 31% down and still have a conventional mortgage.
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