Here’s what they are, and why this is good news to you!
The Federal Housing finance Agency (FHFA) announced its new conforming loan limits for 2023. But with the increasing prices of homes in Santa Cruz County, will this really offer any help to buyers trying to get started in the market? Let’s take a deeper dive into what this really means for you!
I sat down and had a chat with the lovely Jean Adams of Cross Country Mortgage here in Santa Cruz County. What I love about Jean is her incredible ability to find a positive take on all situations, and to always seek out solutions to any problem. I knew she was the one to ask about Helping Locals Stay Local, and to share some good news for buyers in this very challenging market. Jean said, “hands down, the best news for buyers this year is the higher conforming loan amount. This could literally open doors for many new buyers!”
The increase varies per county, but here in Santa Cruz County the new loan limit increased from $970,800 to $1,089,300. That’s almost $120,000 more that a buyer can borrow under the conforming loan guidelines.
So, what’s a conforming loan? A loan is considered conforming when it meets specific guidelines set by two government sponsored institutions, Fannie Mae and Freddie Mac. Getting a conforming loan can benefit you because generally it has easier qualification guidelines, lower interest rates, therefore lower monthly payments, AND requires less of a down payment. Overall, less money is spent over the life of the loan.
This means a home buyer now has the option to take advantage of more money to buy a home with a conforming loan program instead of a Jumbo loan program (or NON-conforming loan) which can be harder to qualify for.
For example: with the new high loan limit of $1,089,300, with only 3.5% down payment in Santa Cruz County, you may purchase a single family home or condo/townhome at a price of $1,128,808 with a down payment of $ 39,508. (Refer back to last week’s article about sources of down payment).
But wait, the good news keeps coming! Jean points out that the increase in loan limits also includes an increase for a Duplex, triplex and a 4plex!
(More about purchasing multi-units in another article coming soon.)
This increase also applies to other programs such as FHA, VA, and other first time home buyer programs.
Remember, loan programs are constantly changing, and, as you can see, there is no 1 size fits all for buyers. There are so many options out there, you must get the advice of an experienced professional. For more information, please call local Mortgage Advisor Jean Adams, click here and tell her I sent you!
I believe that with Information, Preparation, and Strategy, you can achieve great success. Let me show you how!
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