The country’s top lender, United Wholesale Mortgage (UWM), raised agency conforming loan limits to $750,000 following other firms’ moves ahead of the Federal Housing Finance Agency’s (FHFA) decision expected next month.
UWM will honor expected limits for conventional and VA loans locked starting Oct. 11, the company said on Wednesday. This represents a 3.2% increase from the current loan limit of $726,200.
The updated limits will also be available on one-unit VA loans and one- to four-unit homes, the Pontiac, Michigan-headquartered lender added.
The FHFA typically releases new loan limits for conforming loans around late November based on home prices for the third quarter. The ceiling doesn’t drop when home prices fall, but it does rise if home prices are up year over year.
Mat Ishbia, CEO at UWM, had mentioned that home prices from Q2 2022 to Q2 2023 rose about 3.3% in a recorded video earlier this month.
“If things stay flat, we can see loan limits could go from $726,200 to over $750,000. That’s only a 3% or 3.5% increase. However, it’s pretty material and it’s a lot,” Ishbia said.
The conforming loan increase is aimed at helping buyers finance homes at the higher end of the price scale as home prices remain stubbornly high.
In anticipation of official limits, some lenders announced increased limits for conventional loans backed by Fannie Mae and Freddie Mac.
Rocket Pro TPO, the wholesale arm of Rocket Mortgage, was the first lender to preemptively raise conforming loan limits this year.
Guaranteed Rate followed suit, making the announcement during the HousingWire Annual conference held Oct. 10-12 in Cedar Creek, Texas.
