Mortgage Loan Limits 2014

It's hard to believe another year is coming to a close. The year 2013 turned out to be a pretty excellent year for real estate in Michigan!

Every year Fannie Mae (FNMA), Freddie Mac (FHLMC), FHA and VA all adjust their loan limits. These limits are the maximum loan amount for a specific loan program. FNMA and FHLMC control the Conventional Loan limit. Conventional loans are your standard plain vanilla mortgage loan and include fixed and adjustable rate loans with loan terms between 10 and 30 years. The Fannie / Freddie loan limit has been set at $417,000 for the past several years. Loans over $417,000 are Jumbo Loans and generally involve a higher interest rate, larger down payment and more strict underwriting guidelines. For 2014 the Conventional Loan limit will remain unchanged at $417,000.

VA loans have long held to the standard of limiting loan amounts to the Conventional Loan Limit (except in certain high cost areas where the limit may be higher). The VA loan limit will remain unchanged in Michigan and is set at $417,000.

The FHA loan limits vary all over the country and are based on average home values in a specific area. FHA increases or decreases the loan limit based on changes to home values over the past year. When home values rise so do loan limits. Conversely, if home values fall then loan limits would go down as well. FHA, in an effort to help support the housing recovery, has allowed loan limits to remain constant over the past 5 years even in the face of falling values. This year that is coming to an end. For Oakland, Macomb and Wayne County, Michigan the FHA loan limit will fall to $271,050 for 2014. Previously the FHA loan could go as high as $297,500 so this is a significant drop and will impact an FHA borrower's purchasing power. Please note that if a home buyer has an accepted offer, makes a loan application and the lender gets the FHA case number prior to December 31st then the loan amount can be up to the 2013 loan limit and will not be subject to the reduction.

So, if you are an FHA buyer and want to purchase a home around $300,000 then get out there and try to find a house to buy before Christmas!

Ken Mascia, Licensed Loan Officer NMLS 135323
(248) 644-1200, ext 15