Fannie Mae, Freddie Mac loan limit increases to more than $510,000

Conforming loan limit has now increased by nearly $100,000 since 2016

The Federal Housing Finance Agency announced Tuesday that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000.

In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350.

This marks the fourth straight year that the FHFA has increased the conforming loan limits after not increasing them for an entire decade from 2006 to 2016.

In 2016, the FHFA increased the Fannie and Freddie conforming loan limit for the first time in 10 years, and since then, the loan limit has gone up by $93,400.

Back in 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the next year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019.

And now, loan limits will top $510,000.

The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act of 2008, which established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels.

Data from FHFA shows that home prices increased by 5.38% on average between the third quarter of 2018 and the third quarter of 2019. Therefore, the baseline maximum conforming loan limit in 2020 will increase by the same percentage.

For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling” on that limit of 150% of the baseline loan limit.

Median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $765,600 — or 150% of $510,400.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $765,600 for one-unit properties.

As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county equivalents in the U.S.

8 Tips for Outdoor Holiday Decorating

You don't want to be the only house on the block that doesn't look great this holiday season. Use these 8 tips to help you with your outdoor holiday decorating.

The holiday season is almost upon us. The weather’s getting colder, and soon the snow will be falling. Lawn and garden tools have given way to Christmas ornaments, gift wrap and artificial evergreens in most department stores. It’ll soon be time to decorate your home for the holidays, indoors and out – and if you’re the kind of person who loves getting in the holiday spirit, why wait? Use these eight tips to show off your festive spirit.

1. Choose a Focal Point

Decorating your home’s exterior, yard, flowerbeds and other outdoor space around a central focal point can help you tie everything together and build a theme for your holiday décor. Many homeowners choose their front porch or even their front door as a focal point, drawing attention to it with a nice wreath, some lights strung around the railing and perhaps an artificial outdoor tree or two.

However, that’s not your only choice. Your focal point could be a large evergreen tree in your front yard, a large statue of Santa in his sled or a nativity scene. Think about choosing a theme for your holiday decorations so everything flows together and you don’t end up buying more decorations than you need.

2. Keep It Simple

You don’t want to go all Clark Griswold with your Christmas lights. Start small, especially if you’ve never decorated the exterior of a home for the holidays before. Spend some time browsing the web for Christmas decorating ideas, and start with a manageable display. For example, just string some lights around the porch instead of lighting up the whole house. You can add to your display later or expand it next year.

3. Buy the Right Lights for Your Needs

If you’ve never purchased Christmas lights for your home before, or if it’s been a while, you may be surprised at the options available to you. There are net lights for bushes, rope lights for illuminating windows, blinking lights, multicolored lights, icicle lights and various kinds of LED lights. Figure out what kind of lights are best for the display you have in mind, as well as which lights will be cheapest to run.

4. Shop Secondhand

Looking to decorate for less this Christmas season? Who can blame you – Christmas is already expensive enough, and surely there’s a more environmentally sustainable way to get in the holiday spirit. Fortunately, you can score piles of gently used, secondhand Christmas decorations at most thrift stores. Buy used and vintage wreaths, statues, nativity scenes and other items of holiday décor for a fraction of the retail price.

5. Play It Safe

When it comes to outdoor holiday decorating, safety is paramount. Use lights labeled with the UL (Underwriters Laboratories) seal of approval and make sure they’re rated for outdoor use. Not sure about getting up on the ladder to string lights along the gutters and around windows? Hire someone to do it, or skip it altogether.

6. Ditch the Staple Gun

When it’s time to hang Christmas lights, leave the staple gun in your toolbox – that’s how your grandpa hung his lights. Electrical tape is a safe, quick and easy alternative that won’t damage your siding, shingles or fingers. It’s also great for protecting electrical connections from the elements. Use Christmas light clips to safely and easily attach lights to shingles and gutters.

7. Start at the Bottom

When decorating something tall for Christmas, such as a large tree, start at the bottom and work your way up. Use a dowel rod staked into the soil to hold an extension cord for powering your lights, and work with the lights illuminated so you can get a better sense of how the finished product will look. Get help stringing the lights around the trunk of a deciduous tree, or zigzagging them through the branches of an evergreen, adding new strings as needed.

8. Decorate Smart

Save yourself some effort and expense and only decorate parts of the yard that people will see. Have a big tree that passersby will only see one side of? Just decorate that side of the tree. You may want to skip decorating parts of the yard that aren’t visible to the public; however, if you have a back patio or deck that you plan to use throughout the Christmas season, feel free to decorate it with weather-resistant garlands, artificial trees, wreaths, lights or table arrangements.

Decorating for the holidays doesn’t have to be a chore. With a little creativity and these helpful tips, you’ll soon have an outdoor display that will inspire neighborhood passersby to stop and admire your work. 

Compliments of America Home Shield

4 Things NOT to Do When Putting Your Home on the Market

4 Things NOT to Do When Putting Your Home on the Market: So you've put your home on the market. Congratulations! As you start checking things off your to-do list, it's also important to pay mind of what NOT to do.

A flood of first-time homebuyers is about to hit the market over the next three years, according to newly released analysis from TransUnion.

TransUnion is currently projecting that at least 8.3 million first-time homebuyers will enter the mortgage market between 2020 and 2022.

That figure is more than any three-year period in the last decade, according to TransUnion’s report.

Image courtesy of TransUnion

On top of that, if economic growth exceeds expectations, the number of looming first-time homebuyers in the next three years could reach as high as 9.2 million.

“While we’ve recently seen a boom in refi activity, actual homeownership rates are down. Challenges have included high home prices, sluggish wage growth and limited housing inventory,” said Joe Mellman, senior vice president and mortgage business leader at TransUnion.

“But we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth and low interest rates are helping affordability,” Mellman added. “As a result, we are optimistic that first-time homebuyers will contribute more to home ownership than at any time since the start of the Great Recession.”

Another TransUnion report from earlier this year painted a similarly flattering picture of the housing market.

That report showed that the number of Gen Z consumers, categorized as those born in 1995 and after, who took out a mortgage more than doubled in the last year.

That report also showed that the number of Gen Z consumers who were credit eligible (meaning they were 18 years or older) increased by 4.5 million in the last year, climbing to 31.5 million in the second quarter 2019.

Additionally, the report showed that over the next three years, another 13 million Gen Z consumers are expected to become credit eligible.

To get more insight into prospective first-time homebuyers’ mindsets, TransUnion surveyed 943 U.S. residents who have never owned a home and expressed interest in buying one in the next three years.

Of the 943 surveyed, 45% said they were seeking more privacy when buying a home, and 44% said building equity/wealth was important when seeking out a home.

Getting married was why 24% said they wanted to purchase a home, while 23% said expanding their family is why they are buying.

“Only 10% of respondents said being tied down to one location would be a reason to delay home purchase. Just like others before them, the younger generation seem to place value in home ownership,” Mellman continued.

But, there are some who aren’t buying at all, just yet.

Delaying home purchase due to not having enough money for a down payment is why 58% said they are delaying their homebuying, and 51% said they said they thought they would need between 10 and 20% for a downpayment, which is why they are delaying buying a home.

“There has been a lot of discussion in the marketplace that younger people today may not be as interested as prior generations in buying a home and being tied down to one location. Our survey results suggest that is not the case at all,” Mellman said. “Rather, younger people may have in fact been deterred from home purchase by challenges they faced in the financially difficult times of the last decade.”