Freddie and Fannie Backstop High-Dollar Mortgages

In response to the rapid appreciation of US home prices over the past few years, the Federal Housing Finance Agency announced that it will backstop mortgages of more than $1 million in some markets. Beginning in 2023, loan limits for both Freddie Mac and Fannie Mae will rise from $970,800 to $1,089,300 in roughly 100 counties designated as “high-cost markets.” These include areas in California, New Jersey, New York, Utah, and Virginia. These conforming loans, which by definition meet Fannie Mae and Freddie Mac guidelines, have smaller down payment requirements and lower closing costs. But they are also the subject of debate. On the one hand, the new limits are needed to keep pace with the current market. On the other, critics argue that borrowers able to afford million-dollar mortgages shouldn’t be a burden to taxpayers. Read more HERE.