2015 Conforming Loan Limits: No Change on National Level
For the tenth (10th) year in a row, the Federal Home Finance Agency (FHFA) will keep it’s conforming or conventional mortgage loan limit at $417,000.
However, for all the Denver Metro Counties, which include Adams, Arapahoe, Broomfield, Douglas, and Jefferson Counties, the conforming mortgage loan limit will increase by $7,350 to $424,350, and in Boulder County, the limit has increased by $39,550 to $456,550. While these increases aren’t substantial, it’s still an increase none-the-less, and any increase helps more potential home-buyers purchase or refinance their homes at the very best interest rates, costs, and terms.
The FHFA 2015 loan limits will go into effect as of January 1, 2015, and will be applied to conventional mortgage loans backed by Fannie Mae (FNMA) and Freddie Mac (FHMLC) and provided my mortgage lenders who are approved to sell mortgage loans they originate to FNMA and/or FHMLC. The new loan limit will be available to include mortgage loans utilized for purchase and refinance transactions.
What is a Mortgage Loan Limit?
Mortgage loan limits refer to the maximum allowable loan amount for a mortgage loan. Mortgage loan limits will vary by mortgage loan type and/or the region where the mortgage loan is originated.
In addition to loan limits for conforming/conventional mortgages backed by FNMA and FHMLC, the Federal Housing Administration (FHA) as well as the Department of Veterans Affairs (VA) enforce specific loan limits on the mortgage loans they insure and guarantee. The only difference, is that there is not a baseline national loan limit for FHA and VA, as there is with FNMA and FHMLC, since loan limits are only set county to county throughout each state in the U.S.
What this means is that regardless of loan type (FNMA, FHMLC, FHA, or VA) mortgage loans which exceed FNMA/FHMLC’s, FHA’s or VA’s already prescribed loan limits, cannot be backed by FNMA and/or FHMLC, FHA, or VA. This in turn means that a home-buyer looking to purchase a home, or a homeowner who’s looking to refinance their mortgage loan, but wants or needs a mortgage loan amount higher than FNMA’s, FHMLC’s, FHA’s, or VA’s mortgage loan limits, typically are required to use a “Jumbo Mortgage Loan”.
This is important, because since Jumbo Mortgage Loans aren’t backed by FNMA or FHMLC, FHA, or VA, they can sometimes have slightly higher interest rates and/or private mortgage insurance (PMI) costs, can possibly have less favorable borrowing terms, and will require a larger down-payment when purchasing a home, or larger equity position when refinancing a home. Therefore, since there aren’t many low-down-payment options in the Jumbo mortgage market, and credit score and history are often much more stringent, the decision to raise the loan limits in the Denver Metro Area in 2015, is a welcomed change.
2015 Conforming Loan Limits for the Denver Metro Area Counties and all other Colorado Counties
As already mentioned, Fannie Mae and Freddie Mac have made the decision to leave the $417,000 loan limit in place for the tenth (10th) year running.
However, for certain counties around the nation, where home prices are above the national median home price, and/or have recently appreciated above this mark, these counties are considered by FNMA and FHMLC, as “high-cost” counties. Therefore, per the significant rates of home appreciation that the Denver Real Estate Markets have enjoyed over the last eighteen (18) months, all the counties that make up the Denver Metro Area, have now been deemed “high-cost” by FNMA and FHMLC. This is why the maximum mortgage loan limits in the Denver Metro Area will be slightly higher than the national mortgage loan limit.
In addition to the Denver Metro Counties and Boulder County, homeowners in Clear Creek, Elbert, Gilpin, and Park Counties will also enjoy an increase in the maximum conforming mortgage loan limits in 2015.
The baseline, non-high-cost conforming loan limits in Colorado for 2015 are:
- One (1) Unit Residence: $417,000
- Two (2) Unit Residence: $533,850
- Three (3) Unit Residence: $645,300
- Four (4) Unit Residence: $801,950
The maximum loan limits for all the Denver Metro Area Counties, which include Adams, Arapahoe, Broomfield, Douglas, and Jefferson Counties as well as for Clear Creek, Elbert, Gilpin, and Park Counties for 2015 are:
- One (1) Unit Residence: $424,350
- Two (2) Unit Residence: $543,250
- Three (3) Unit Residence: $656,650
- Four (4) Unit Residence: $816,050
The maximum loan limits for Boulder County for 2015 are:
- One (1) Unit Residence: $456,550
- Two (2) Unit Residence: $584,450
- Three (3) Unit Residence: $706,500
- Four (4) Unit Residence: $878,000
The maximum loan limits for Hinsdale County for 2015 are:
- One (1) Unit Residence: $427,800
- Two (2) Unit Residence: $547,650
- Three (3) Unit Residence: $662,000
- Four (4) Unit Residence: $822,700
The maximum loan limits for Ouray County for 2015 are:
- One (1) Unit Residence: $425,500
- Two (2) Unit Residence: $544,700
- Three (3) Unit Residence: $658,450
- Four (4) Unit Residence: $818,250
The maximum loan limits for Colorado’s highest-cost Counties which include Eagle, Garfield, Lake, Pitkin, Routt, San Miguel, and Summit Counties for 2015 are:
- One (1) Unit Residence: $625,500
- Two (2) Unit Residence: $800,775
- Three (3) Unit Residence: $967,950
- Four (4) Unit Residence: $1,202,925
As always, should you have any questions regarding the new loan limits for the Denver Metro Area, or want more information on how mortgage loan limits work in general for any or all loan types, please complete the contact form to the right, and I’ll be back in touch with you within twenty-four (24) hours.