Key Takeaways:
– United Wholesale Mortgage and Guaranteed Rate are pricing mortgages up to $750,000 as if they meet Fannie Mae and Freddie Mac’s conforming loan limits.
– Rocket Mortgage was the first lender to announce this, treating loans up to $750,000 as conforming.
– The increase in loan limits is expected to be announced by the Federal Housing Finance Agency next month.
– Borrowers who would otherwise need a jumbo mortgage can benefit from this increase.
– Guaranteed Rate and UWM have also followed suit in offering loans up to $750,000 as conforming.
– There are certain rules and requirements for borrowers to qualify for these loans.
inman:
No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.
United Wholesale Mortgage and Guaranteed Rate are the latest lenders to say they’ll price mortgages of up to $750,000 as if they meet Fannie Mae and Freddie Mac’s conforming loan limits in advance of an expected increase in the limits next year.
Rocket Mortgage was the first lender to get a jump on Fannie and Freddie’s federal regulator, the Federal Housing Finance Agency (FHFA), which next month is expected to announce an increase in the 2024 conforming loan limit from the 2023 baseline of $726,200 for one-unit properties in most of the country.
Rocket announced on Oct. 2 that the company’s wholesale channel, Rocket Pro TPO, would treat loans of up to $750,000 for one-unit properties in the lower 48 states as conforming, and up to $1.125 million in Alaska and Hawaii.
That assumes that the FHFA’s seasonally adjusted, expanded-data House Price Index will show home prices posted annual gains of at least 3.3 percent when it’s released on Nov. 28.
“We’re very comfortable with that $750,000 number,” Rocket Pro TPO EVP Mike Fawaz told Inman at the time. Rocket will hold the loans that exceed the current conforming loan limit until the new loan limit goes into effect on Jan. 1, he said.
The head start on the increase is welcome news for borrowers who would otherwise need to take out a jumbo mortgage too big for purchase by Fannie and Freddie. Jumbo mortgages tend to have stricter underwriting and higher down payment requirements, and lately, many borrowers have also had to pay higher rates for jumbo mortgages than they would if they were taking out a conforming loan.
For homebuyers making a 10 percent down payment, a $750,000 loan would enable them to buy a home priced at up to about $830,000 if they didn’t need to finance their closing costs.
After Rocket dipped its toe in the water, Guaranteed Rate followed suit, announcing an “Expanded Loan Amount Conforming Program,” on Oct. 9.
“There are some rules on who can get this loan and what type of home it can be used for,” Guaranteed Rate’s announcement said. “You must be purchasing a one-unit residence that you will use as your primary residence. And you must meet the minimum credit requirements.”
UWM announced higher expected limits for conventional and VA loans Wednesday, with loans of up to $750,000 for one-unit properties treated as conforming. A UWM spokesperson told Inman updated conforming loan limits are also available on one-unit VA mortgages and conventional loans for dwellings with up to four units.
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Property Chomp's Take:
In the ever-changing world of real estate, it can be challenging to predict what the future holds. However, there are steps you can take to prepare yourself for whatever comes your way. Whether you are a buyer, seller, or real estate professional, staying informed and equipped with the right tools is essential.
One event that can help you navigate the future of real estate is the Virtual Inman Connect, taking place on November 1-2, 2023. This event offers valuable insights, networking opportunities, and access to industry experts who can provide guidance on what to expect in the coming years. Additionally, Inman Connect New York, scheduled for January 23-25, 2024, will focus on topics such as AI and capital, which are set to take center stage in the real estate industry.
In recent news, United Wholesale Mortgage (UWM) and Guaranteed Rate have announced that they will be pricing mortgages of up to $750,000 as if they meet Fannie Mae and Freddie Mac's conforming loan limits. This move comes ahead of an expected increase in the loan limits next year. Rocket Mortgage was the first lender to make this announcement, stating that loans of up to $750,000 for one-unit properties in the lower 48 states will be treated as conforming. This is great news for borrowers who would otherwise need to take out a jumbo mortgage, which often comes with stricter underwriting and higher down payment requirements.
The increase in loan limits allows homebuyers to purchase properties priced up to approximately $830,000, assuming a 10 percent down payment and no need to finance closing costs. This opens up more opportunities for buyers and provides them with more affordable financing options.
It's important to note that these changes are based on the assumption that the FHFA's House Price Index will show home prices with annual gains of at least 3.3 percent when it is released on November 28. This index plays a crucial role in determining loan limits, as it reflects the overall health of the housing market.
By staying updated on the latest news and industry trends, you can make informed decisions and position yourself for success in the real estate market. Attending events like Inman Connect can provide you with valuable insights and tools to navigate the future of the industry. With the right knowledge and resources, you can prepare for whatever changes come your way and thrive in the real estate market.
