December 14

2020 Loan Limits

photo of homes built out of 100 dollar bills for orange county mortgage broker website

Recently the Federal Housing Finance Agency (FHFA) announced that conforming loan limits will be increased for 2020. The maximum amount for the lower 48 states for one-unit properties will be raised to $510,400 from $484,350. In high-cost counties, such as Orange County, the maximum high-balance mortgage will be $765,600, up from $726,525.

This is good news for borrowers, as it will give more options and increased flexibility when choosing the right mortgage. Traditionally, conforming loans have had better interest rates than jumbo loans. In today’s market, that is not true for all borrowers, yet conforming loans do have some benefits in regards to guidelines.  Many borrowers are able to obtain great rates with looser guidelines than the stringent guidelines of jumbo loans. Some of those benefits include:

  • Appraisal Waivers – many borrowers are able receive appraisal waivers relieving them from the cost and time of obtaining an appraisal
  • One year tax returns for self-employed borrowers – this is especially advantageous for those who might have had higher earnings on their most recent year tax returns
  • Limited Homeowner’s Association Certificates on condominiums – reduces the amount of information the lender requests from the HOA , thus saving time and money
  • Less money in reserves required – the lenders don’t need to see as much money in the bank, giving borrowers flexibility and an ability to purchase a more expensive home
  • More aggressive debt to income (DTI) ratios – jumbo lenders will frequently cap your DTI at 43%, but many well qualified borrowers can go up to 50% with a conforming loan

Keep in mind that loan limits were increased again in 2022, for more, check out Orange County Mortgage Loan Limits in 2022.

Contact us today to explore your mortgage options!


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