Rising home prices equal larger loan amounts for cash-strapped home buyers. In recognition of increased values, the Federal Housing Finance Agency (FHFA) announced that maximum conforming loan limits for mortgages will increase in 2018.

A conforming loan is backed or later will be acquired by Fannie Mae and Freddie Mac, and therefore adheres to their guidelines.

Home values rose an average of 6.8 percent between the third quarter of 2016 and the third quarter of 2017, according to the FHFA House Price Index. The baseline maximum conforming loan limit for a one-unit property will increase by that same amount to $453,100, up from $424,100 in 2017.

A conforming loan has different guidelines and requirements for borrower than a nonconforming or jumbo loan.

In addition to the baseline limit, the FHFA sets higher limits for high-cost housing markets. In most high-cost areas, the limit will be $679,650 based on a “ceiling” of 150 percent of the baseline loan limit. In some areas of Alaska, Hawaii, Guam and the U.S. Virgin Islands, loan limits may be higher.

The maximum conforming loan limit will be higher in 2018 in all but 71 counties in the U.S. because of widespread rising home prices. In Washington, D.C., the conforming loan limit will be $679,650, up from $636,150 in 2017.

To find out the limits in a specific area, click here.

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