The Federal Housing Finance Agency (FHFA) has announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2017 will increase to $424,100 from $417,000. While the increase is modest, it is the first increase in the baseline loan limit since 2006. In high-cost areas, which are areas where 115 percent of the local median home value exceeds the baseline loan limit, the loan limit has increased to $636,150 for properties in the contiguous United States. Special local loan limits apply in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. While the baseline loan limit in such areas will be $636,150, that actual limit may be higher in some specific locations. The limits noted above are for one-unit properties, and higher limits apply for two- to four-unit properties.

Adjustments to the baseline loan limit are required to be made each year to reflect changes in the national average home price by the Housing and Economic Recovery Act of 2008 (HERA). However, HERA precluded raising the baseline loan limit until the average U.S. home price returned to the level before the recent housing crisis. The third quarter 2016 House Price Index published by FHFA demonstrates that house prices are now higher than their level in the third quarter of 2007.