2021 NEW Conventional Max Loan Limits!

Certified Mortgage Advisor
NMLS 1701021
Published 
November 26, 2020

Minimum down payment for Conventional Loan

Every year we get new loan limits on conventional loans from FHFA. This is going to tell us what's the max loan that we can get on a conventional loan with the minimum down payment.

What's the increase for 2021?

So this has been increased to $548,250. This is a $37,850 increase over 2020s numbers. So these come into play at the beginning of 2021, meaning this can now be your new max loan limit on a conventional loan.

Almost $40,000 increase!

So in 2020, this was 510,400. So again, we're having almost a $40,000 increase in how much the loan limit is.

Exception in high-cost areas

Now, something that's interesting about this is there's a maximum, but they make exceptions for high-cost areas. So they define these as high-cost areas are 115% of the local median home value exceeds the conforming loan limit. So basically there are some counties where the loan limit is actually increased. To accommodate for the fact that it's a high-cost area. And this has a max ceiling of up to $822,375. So it goes pretty high in some of these counties.

County Loan Limit Interactive Map

Now, you can check FHFA County Loan Limit Interactive Map. So you can see the county that you're in and the max loan limit on a conventional loan there. And you'll be able to see where some of these high-cost areas are.

Expect that purchase price is higher

Now that's just the loan limit. That's not actually the purchase price. Your purchase price is going to be higher because you're going to have a down payment in there.

Scenarios

So have a couple of different scenarios here. Let's first look at the old limit here. So 510,400. If you did a 5% down payment, your purchase price is 537,263. Now the new limit. I pulled an example for orange county, Florida. The new limit is 548,250 with a 5% down. That's up to now a purchase price of $577, 105. That means you can purchase a $577,000 house with the minimum down payment on a conventional loan. In this, we're just saying 5% is what we'll go with. Now. It's almost a $40,000 increase in how much you can now purchase from last year with the minimum loan limits.

Jumbo Loan

This is huge because if you exceed these loans, for your county, you have to get into a jumbo loan. Jumbo loans normally require higher down payments and they can be harder to qualify.

Let's check other cities

Now, if we look at a high-cost area, somewhere like Sacramento, California, that county loan limit is 598. So if you did 5% down, that's going to give you a max purchase price of almost $630,000.

Then the ceiling is one county that has a ceiling in Fairfax, Virginia. So 822,375, if we do 5% down, that gives us a max purchase price of $865,657. So that allows you to not have to get into the jumbo loan territory, which can be a whole other beast on its own. A lot more difficult to qualify for.

You can use a regular conventional loan going all the way up to an $865,000 house in specific high-cost counties. And if you're not in a high-cost county, you can go all the way up to $577,000 to purchase a home with a minimum down payment on a conventional loan.

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