FHFA Moves to Make Housing More Affordable
Every year around this time, the Federal Housing Finance Agency (FHFA) updates the maximum conforming loan limits for Fannie Mae and Freddie Mac. For 2026, the maximum conforming limit is $832,750, which is an increase of $26,250 from 2025. So why does this matter, and how does it impact housing affordability? First, I will give you a little history.
When I started in the mortgage business in 1984, the maximum conforming limit was $114,000. By 2006, it reached $417,000 and then stayed there for 10 years as the housing market recovered from the financial crisis. Since 2016, it has steadily increased, almost doubling in the last 10 years. The conforming loan limit is based on the FHFA’s House Price Index, which includes statistics on the increase in average home values over the last four quarters.
The conforming limit is important because it impacts interest rates, maximum loan-to-value ratios, and underwriting. Mortgages that are under the conforming limit usually have the lowest rates available. Conforming loans allow as little as 3% down for first-time homebuyers and 5% down for others. Also, the underwriting is uniform and predictable. So, the higher the conforming limit, the more potential buyers can take advantage of the rates and programs. In an area like the DMV, where housing costs are high, this is a welcome boost.
