Do VA loans in California require private mortgage insurance, or PMI? Is there some other…
The maximum mortgage amount for a conforming home loan in California has been increased for 2018. Depending on the county in which you reside, the new conforming loan limit will fall somewhere between $453,100 and $679,650. These maximum loan amounts for California apply to both conventional and VA guaranteed home loans.
Max Loan Amount in California Goes Up in 2018
On November 28, the Federal Housing Finance Agency (FHFA) announced that it was increasing the conforming loan limits for most counties across the country. Loan limits in California and nationwide are being increased from 2017 to 2018 in response to significant home-price gains that occurred over the last year or so.
By definition, a conforming loan is one that meets or conforms to the guidelines established by the FHFA, and can therefore be sold to Freddie Mac or Fannie Mae.
In most counties across California, the maximum conforming loan amount for 2018 has been increased to $453,100. In fact, this is the “baseline” limit for most counties across the country. And it’s quite a bit higher than the 2017 baseline of $424,100.
But the max loan amount in California varies from one county to the next. These conforming limits are based on median home values, which vary by location. As a result, higher priced real estate markets like those in the Bay Area can have a higher max loan amount. In these “high-cost” areas, the conforming loan limit for a single family property purchase is $679,650 in 2018.
Note: These max loan amounts for California apply to the VA mortgage program as well. The Department of Veterans Affairs recently updated its website with the following message: “VA’s 2018 Loan Limits are the same as the Federal Housing Finance Agency’s … effective January 1, 2018.”
New Definition of a ‘Jumbo’ Mortgage
A jumbo loan is essentially the opposite of a conforming loan, at least in terms of size.
- A conforming loan can be sold into the secondary mortgage market because it conforms to the size limits mentioned above.
- A mortgage loan that exceeds these conforming limits is referred to as a jumbo mortgage.
It’s possible to obtain financing that exceeds the max conforming loan amount for California, as long as the borrower’s income supports it. Please contact us if you have questions about qualifying for a mortgage in California, whether it’s a conforming or a jumbo loan.
Possible Changes to FHA Limits Forthcoming
Mortgage loans that are insured by the Federal Housing Administration (FHA) have their own set of rules. In some counties across the country, FHA loan limits match the ones used for conforming mortgage loans. But in other counties, they are different. It varies.
FHA limits are issued by the Department of Housing and Urban Development (HUD), which oversees the Federal Housing Administration mortgage insurance program. There’s a chance HUD will increase California FHA loan limits in 2018, to coincide with the changes made by FHFA. We expect an announcement from HUD toward the end of this month.
How Much Can You Borrow for a California Home Loan?
Loan limits are the official size caps for different mortgage programs. But they are not a guarantee of funding. The amount you can borrow for a home loan in California will largely depend on your current income and debt situation. And that’s something we can help you with.
The loan experts at Bridgepoint Funding can review your financial situation to determine how much you might be able to borrow. It’s wise to do this early on in the home buying process, because it can help you narrow your housing search.