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FREEandCLEAR Mortgage Expert Blog

Welcome to the FREEandCLEAR Mortgage Expert Blog! The FREEandCLEAR Mortgage Expert possesses over 40 years of mortgage industry experience and uses this blog to bring you insights on the latest mortgage market news and developments. We also use the FREEandCLEAR Mortgage Expert Blog to launch and highlight features, functionality and content offerings on FREEEandCLEAR.com so sign up below to receive blog updates via email or check back frequently.

 
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POSTED: Tuesday January 23, 2018

Saving enough money for a down payment is one of the biggest obstacles to buying a home, especially for first-time home buyers looking to crack the market.  Over the past several years rising rents and relatively stagnant wage growth have magnified the down payment challenge and many prospective home owners remained locked out of owning a home. … Read More

POSTED: Tuesday January 23, 2018

Saving enough money for a down payment is one of the biggest obstacles to buying a home, especially for first-time home buyers looking to crack the market.  Over the past several years rising rents and relatively stagnant wage growth have magnified the down payment challenge and many prospective home owners remained locked out of owning a home.  This dynamic helps explain why the homeownership rate in the U.S. continues to hover near a historical low and why first-time home buyers comprise a smaller portion of overall buyers as compared to the past 20 years.

 

In light of these trends, mortgage programs that enable you to buy a home with little or no down payment should be gaining in popularity.  It appears, however, that a significant portion of borrowers are unaware of the wide range of low down payment programs available to them.  According to the FREEandCLEAR Mortgage Survey, 20% of borrowers said it is not possible to buy a home with a down payment of less than 5%.  So one in five survey respondents may be missing out on home ownership assistance programs that significantly improve their ability afford to buy a home.

 

Borrowers are unaware of low down payment mortgage programs

Many borrowers are unaware of low down payment mortgage programs

 

The question becomes, why are more borrowers not aware of these potentially helpful mortgage programs?  There certainly is not a lack of no or low down payment mortgage programs including both government-backed and conventional options.  On the government-sponsored side, the VA and USDA home loan programs enable eligible applicants to buy a home with no money down while the FHA mortgage program requires a down payment of 3.5% and the HUD Section 184 Program only requires a down payment of 2.25% (for loans above $50,000).

 

On the conventional side, the HomeReady and Home Possible mortgage programs only require a down payment of 3.0%, Fannie Mae also sponsors a standard 3.0% down program and a number of lenders even offer 1% down mortgage programs.  Additionally, Bank of America, Chase, Citibank, Wells Fargo and numerous other lenders offer conventional mortgage programs that enable you to buy a home with a down payment of 3.0% to 5.0%.  Given the countless options it is certainly surprising that many prospective home owners do not know that these programs exist.

 

Some borrowers might think that no or low down payment mortgage programs were eliminated when tighter lending standards were implemented following the mortgage crisis.  Although new lending guidelines may make it more challenging to qualify for a mortgage, home buyer assistance programs remain a viable option for many borrowers.  In fact, we have experienced an increase in the number of these programs over the past several years.

 

While it may be impossible to pinpoint why so may borrowers do not know about home ownership assistance programs it is clear that more needs to be done to educate prospective homeowners about the benefits of these programs.  While each program has its pros and cons, including extra costs in some cases, they can be a highly valuable resource for people who think owning a home is out of reach.  Increasing awareness of no and low down payment mortgage programs could help more people buy homes, which is good for both borrowers and lenders.

 

We will continue to provide a detailed analysis of each survey question on our blog in the coming weeks and you can review the full results from the FREEandCLEAR Mortgage Survey to better understand how borrowers think about and experience the mortgage process.

POSTED: Tuesday January 02, 2018

The recovery in the housing market and higher property values means higher VA loan limits for 2018.  That makes two years in a row that the Federal Housing Finance Agency (FHFA), the government body that the Department of Veterans Affairs uses to determine VA loan limits, increased loan limits.  This is only the second time… Read More

POSTED: Tuesday January 02, 2018

The recovery in the housing market and higher property values means higher VA loan limits for 2018.  That makes two years in a row that the Federal Housing Finance Agency (FHFA), the government body that the Department of Veterans Affairs uses to determine VA loan limits, increased loan limits.  This is only the second time in over a decade that the VA loan limits increased, demonstrating the general strength of the real estate sector and appreciating home prices.  Specifically, the basic standard 2018 VA loan limit for a single unit property increased by approximately 7%.

 

The 2018 VA loan limits are important because they are used to determine what size loans are permitted according to VA Home Loan Program guidelines.  In short, the VA guarantees 25% of the loan amount up to the loan limit.  The higher the VA loan limit, the higher the mortgage amount you may be able to qualify for and the more home you can afford.

 

2018 VA Loan Limits

2018 VA Loan Limits are increasing

 

Please note that it is possible to obtain a mortgage amount that is greater than the VA loan limit but lenders typically require borrowers to make a down payment equal to 25% of the amount by which the mortgage exceeds the loan limit.  So while technically there is no maximum VA mortgage amount according to program guidelines, in practice the VA loan limits effectively restrict what size mortgage most borrowers can obtain using the VA Home Loan Program.

 

Below, we outline the VA loan limit changes and summarize the FREEandCLEAR resources you can use to determine the 2018 VA loan limit for your county.  Please note that there is one set of VA loan limits for the contiguous United States, District of Columbia and Puerto Rico and a higher set of loan limits for Alaska, Guam, Hawaii and the U.S. Virgin Islands.  Additionally, within each region there is a basic standard VA loan limit and a high cost VA loan limit for properties located in counties with higher home prices.

 

2018 VA Loan Limits — United States, District of Columbia and Puerto Rico

In the contiguous United States, Washington D.C. and Puerto Rico, the general VA loan limit increases from $424,100 to $453,100 in 2018. The table below compares the general 2018 VA loan limit to the 2017 loan limit.

 

Contiguous United States, District of Columbia and Puerto Rico
Basic Standard VA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 453,100 $ 424,100 6.8%

 

In the contiguous United States, Washington D.C. and Puerto Rico, the high cost area VA loan limit increases from $636,150 to $679,650 in 2018.  The table below compares the high cost area 2018 VA loan limit to the 2017 loan limit.

 

Contiguous United States, District of Columbia and Puerto Rico
High Cost Area VA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%

 

2018 VA Loan Limits — Alaska, Hawaii, Guam and the U.S. Virgin Islands

The VA loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands are higher than the loan limits for the contiguous United States.  In Alaska, Hawaii, Guam and the U.S. Virgin Islands the basic standard VA loan limit increases from $636,150 to $679,650 in 2018.  The table below compares the basic standard 2018 VA loan limit to the 2017 loan limit.

 

Alaska, Hawaii, Guam and the U.S. Virgin Islands                           
Basic Standard VA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%

 

In Alaska, Hawaii, Guam and the U.S. Virgin Islands, the high cost area VA loan limit increases from $954,225 to $1,019,475 in 2018.  The tables below compares the high cost area 2018 VA loan limit to the 2017 loan limit.

 

Alaska, Hawaii, Guam and the U.S. Virgin Islands                              
High Cost Area VA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 1,019,475 $ 954,225 6.8%

 

FREEandCLEAR Resources

 

As always, all the FREEandCLEAR resources are free to use.  We encourage you to use our tools to understand how the 2018 VA loan limits apply to you.

POSTED: Tuesday January 02, 2018

The improvement in the housing market and increasing home prices have resulted in higher FHA loan limits for 2018.  2018 represents the second year in a row — and only the second time in over a decade — that FHA loan limits increased.  The higher 2018 FHA loan limits underscore the overall health of the… Read More

POSTED: Tuesday January 02, 2018

The improvement in the housing market and increasing home prices have resulted in higher FHA loan limits for 2018.  2018 represents the second year in a row — and only the second time in over a decade — that FHA loan limits increased.  The higher 2018 FHA loan limits underscore the overall health of the real estate industry as well as rising property values.  Specifically, the basic standard 2018 FHA loan limit for a single unit property increased by approximately 7% as compared to the 2017 FHA loan limit.

 

2018 FHA Loan Limits

2018 FHA Loan Limits are increasing

 

The 2018 FHA loan limits are important because they determine the maximum mortgage amount according to FHA Program rules.  In short, the higher the FHA loan limit, the higher the mortgage amount you may be able to qualify for and the more home you can afford.

 

Loan limits are especially significant for FHA mortgages because borrowers are only required to make a down payment of 3.5% of the property purchase price according to FHA Program guidelines.  Higher FHA loan limits mean that borrowers may be able to afford significantly more home without a proportional increase in their down payment.  For example, the basic standard 2018 FHA loan limit for a single unit property increases by $18,850.  So in 2018 a home buyer could potentially use an FHA loan to buy a home that costs $18,850 more with only a $660 increase in the required down payment.

 

Below, we outline the FHA loan limit changes and summarize the FREEandCLEAR resources you can use to determine the 2018 FHA loan limit for your county.  Please note that there is one set of FHA loan limits for the contiguous United States, District of Columbia and Puerto Rico and a higher set of loan limits for Alaska, Guam, Hawaii and the U.S. Virgin Islands.  Additionally, within the contiguous United States, District of Columbia and Puerto Rico there is a basic standard FHA loan limit and a high cost FHA loan limit for properties located in counties with higher property values.

 

2018 FHA Loan Limits — United States, District of Columbia and Puerto Rico

In the contiguous United States, Washington D.C. and Puerto Rico, the basic standard FHA loan limit for a single unit property increases from $275,665 to $294,515 in 2018. The basic standard 2018 FHA loan limit for a four unit unit property increases from $530,150 to $566,425.  The tables below compares the basic standard 2018 FHA loan limits to the 2017 loan limits.

 

Contiguous United States, District of Columbia and Puerto Rico
Basic Standard FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 294,515 $ 275,665 6.8%
2 $ 377,075 $ 352,950 6.8%
3 $ 455,800 $ 426,625 6.8%
4 $ 566,425 $ 530,150 6.8%

 

In the contiguous United States, Washington D.C. and Puerto Rico, the high cost area FHA loan limit for a single unit property increases from $636,150 to $679,650 in 2018. The high cost area 2018 FHA loan limit for a four unit unit property increases from $1,223,475 to $1,307,175.  The tables below compares the high cost area 2018 FHA loan limits to the 2017 loan limits.

 

Contiguous United States, District of Columbia and Puerto Rico
High Cost Area FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%
2 $ 870,225 $ 814,500 6.8%
3 $ 1,051,875 $ 984,525 6.8%
4 $ 1,307,175 $ 1,223,475 6.8%

 

2018 FHA Loan Limits — Alaska, Hawaii, Guam and the U.S. Virgin Islands

The FHA loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands are higher than the loan limits for the contiguous United States.  In Alaska, Hawaii, Guam and the U.S. Virgin Islands the FHA loan limit for a single unit property increases from $954,225 to $1,019,475 in 2018. The 2018 FHA loan limit for a four unit unit property increases from $1,835,200 to $1,960,750.  The tables below compares the general 2018 FHA loan limits to the 2017 loan limits.

 

Alaska, Guam, Hawaii, and the U.S. Virgin Islands                           
FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 1,019,475 $ 954,225 6.8%
2 $ 1,305,325 $ 1,221,750 6.8%
3 $ 1,577,800 $ 1,476,775 6.8%
4 $ 1,960,750 $ 1,835,200 6.8%

 

FREEandCLEAR Resources

 

As always, all the FREEandCLEAR resources are free to use.  We encourage you to use our tools to understand how the 2018 FHA loan limits apply to you.

POSTED: Tuesday January 02, 2018

The sustained rebound in the real estate market and increase in home prices over the course of 2017 has resulted in higher conforming loan limits for 2018.  For the second year in a row, the Federal Housing Finance Agency (FHFA), the government agency that sets the conforming loan limits, announced an increase in loan limits… Read More

POSTED: Tuesday January 02, 2018

The sustained rebound in the real estate market and increase in home prices over the course of 2017 has resulted in higher conforming loan limits for 2018.  For the second year in a row, the Federal Housing Finance Agency (FHFA), the government agency that sets the conforming loan limits, announced an increase in loan limits for the coming year.  This is only the second time since 2006 that the FHFA raised conforming loan limits, reflecting the overall health of the real estate market as well as improving property values.  In fact, the general 2018 conforming loan limit for a single unit property increased by 6.8%.

 

The 2018 conforming loan limits are important because they help determine your mortgage rate and eligibility for certain no or low down payment mortgage programs.  In short, loan amounts that are below the conforming loan limits typically qualify for lower mortgage rates and are eligible for home buyer assistance programs.  So the higher 2018 conforming loan limits are positive for borrowers, especially as property values continue to climb.  The 2018 conforming loan limits go into effect on January 1, 2018.

 

2018 conforming loan limits

2018 Conforming Loan Limits are set to increase

 

Below, we summarize the loan limit changes and summarize the FREEandCLEAR tools you can use to determine the 2018 conforming loan limit for your county.  Please note that there is one set of conforming loan limits for the contiguous United States, District of Columbia and Puerto Rico and a higher set of loan limits for Alaska, Guam, Hawaii and the U.S. Virgin Islands.  Additionally, within each geographic classification there is a general conforming loan limit and high cost area conforming loan limit for properties located in counties with higher property values.  The conforming loan limits also vary by number of units in the property, ranging from one unit to four units.   

 

2018 Conforming Loan Limits — United States, District of Columbia and Puerto Rico

In the contiguous United States, Washington D.C. and Puerto Rico, the general conforming loan limit for a single unit property increases from $424,100 to $453,100 in 2018. The general 2018 conforming loan limit for a four unit unit property increases from $815,650 to $871,450.  The table below compares the general 2018 conforming loan limits to the 2017 loan limits.

 

Contiguous United States, District of Columbia and Puerto Rico
General Conforming Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 453,100 $ 424,100 6.8%
2 $ 580,150 $ 543,000 6.8%
3 $ 701,250 $ 656,350 6.8%
4 $ 871,450 $ 815,650 6.8%

 

In the contiguous United States, Washington D.C. and Puerto Rico, the high cost area conforming loan limit for a single unit property increases from $636,150 to $679,650 in 2018. The high cost area 2018 conforming loan limit for a four unit unit property increases from $1,223,475 to $1,307,175.  The table below compares the high cost area 2018 conforming loan limits to the 2017 loan limits.

 

Contiguous United States, District of Columbia and Puerto Rico
High Cost Area Conforming Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%
2 $ 870,225 $ 814,500 6.8%
3 $ 1,051,875 $ 984,525 6.8%
4 $ 1,307,175 $ 1,223,475 6.8%

 

2018 Conforming Loan Limits — Alaska, Hawaii, Guam and the U.S. Virgin Islands

The conforming loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands are higher than the loan limits for the contiguous United States.  In Alaska, Hawaii, Guam and the U.S. Virgin Islands the general conforming loan limit for a single unit property increases from $636,150 to $679,650 in 2018. The general 2018 conforming loan limit for a four unit unit property increases from $1,223,475 to $1,307,175.  The table below compares the general 2018 conforming loan limits to the 2017 loan limits.

 

Alaska, Hawaii, Guam and the U.S. Virgin Islands                            
General Conforming Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%
2 $ 870,225 $ 814,500 6.8%
3 $ 1,051,875 $ 984,525 6.8%
4 $ 1,307,175 $ 1,223,475 6.8%

 

In Alaska, Hawaii, Guam and the U.S. Virgin Islands, the high cost area conforming loan limit for a single unit property increases from $954,225 to $1,019,475 in 2018. The high cost area 2018 conforming loan limit for a four unit unit property increases from $1,835,200 to $1,960,750.  The table below compares the high cost area 2018 conforming loan limits to the 2017 loan limits.

 

Alaska, Hawaii, Guam and the U.S. Virgin Islands                             
High Cost Area Conforming Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 1,019,475 $ 954,225 6.8%
2 $ 1,305,325 $ 1,221,750 6.8%
3 $ 1,577,800 $ 1,476,775 6.8%
4 $ 1,960,750 $ 1,835,200 6.8%

 

FREEandCLEAR Resources

As always, all the FREEandCLEAR resources are free to use.  We encourage you to use our tools to understand how the 2018 conforming loan limits apply to you.

 

 
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