Fannie Mae and Freddie Mac Baseline Limit Will Increase in 2018

Because of rising home prices, Fannie Mae and Freddie Mac have increased their loan limits in 2018.

  • Conforming loan for one-unit property in 2018 will be $453,100
  • Conforming loan for one-unit property in 2018 in higher priced counties will be higher, for example for San Mateo county it will be $679,650

FHFA Announcement – Loan Limits in 2018

Loan Limits by County in 2018


Have you decided to sell your house in the next 7 years?


Have you decided to sell your house within the next 7 years?

In that case refinancing now with a 7/1 Adjustable Rate Mortgage (ARM) from a 30 year fixed would mean a lower interest rate for the first 7 years.

A 7/1 ARM, is a mortgage loan amortized over 30 years:

– the first 7 years start with a very low interest rate
– depending on the particular program the rate will then adjust periodically
(for example every 12 months)
– the new adjusted rates will be based in a particular interest index
(for example the “London Interbank Offered Rate” – Libor) + a margin
– the margin is the same for the life of the loan
(for example 3 %)
– most 7/1 ARM programs have caps, a lifetime cap good for the life of the loan,
and periodic caps, which cap how much the intereste rate can change each
rate adjustment

Anyway, if your intention is to sell within 7 years then the lower rates during the first 7 years of the loan, would offset the potential interest rate increases beyond those first 7 years.

Note, there are 1 year, 2 year, 3 year, 5 year, 7 year, and 10 year ARMs.

New Fannie Mae Debt Guidelines


New Fannie Mae guidelines will potentially help those with high debt. As long as the borrower’s debt to income ratio (DTI) isn’t above 50% and they have other positive factors, they could be approved for an affordable Fannie Mae mortgage.

“But here’s some good news: The country’s largest source of mortgage money, Fannie Mae, soon plans to ease its debt-to-income (DTI) requirements, potentially opening the door to home-purchase mortgages for large numbers of new buyers. Fannie will be raising its DTI ceiling from the current 45 percent to 50 percent as of July 29.”