The current threshold for a jumbo loan in King County, Washington is $592,250. But there’s a chance we could see higher conventional loan limits in King County for 2018, as a result of steady home-price growth over the last year. Here’s an updated look at jumbo and conforming loan limits with the county, with an outlook for 2018.
What Is a ‘Jumbo’ Mortgage, Exactly?
By definition, a jumbo loan is one that exceeds the maximum size limits for purchase by Freddie Mac and Fannie Mae.
Each year, these two government-sponsored enterprises (and their regulator, the Federal Housing Finance Agency) establish a maximum amount for the loans they can buy from mortgage lenders. In 2017, these “conforming” limits ranged from $417,000 to $625,500. They vary by county, because they are based on median home prices.
When a mortgage loan exceeds these conforming limits, it is referred to as a jumbo loan. Generally speaking, the qualification criteria for jumbo mortgage products can be a bit more strict, when compared to their smaller / conforming counterparts.
So what’s considered a jumbo loan in King County, Washington, in 2017? Currently, the county has a conforming loan limit of $592,250, for a single-family property. So anything above that would be considered jumbo.
To be clear, it’s possible to borrow more than this amount. But a higher down payment might be required, due to the larger size of the loan. Please contact us if you have questions about applying for a jumbo loan in King County, Washington.
Home Prices Rising Steadily
Home prices across the county – and within the Seattle metropolitan area, in particular – have risen steadily and sharply over the last few years. In fact, King County has seen some of the biggest year-over-year price increases of any county in the country.
According to the latest data, the median home price in the area rose to $650,000 in August 2017. That was an increase of roughly $100,000 from the same month a year earlier.
You’ll recall that the current conforming loan limit for conventional (non-government-backed) mortgage loans in King County is $592,250, for a single-family home. The median, or midpoint, for home prices in the county has risen well above that level. So more than half of all properties are now priced higher than the conforming loan limit, according to the latest housing data.
Will King County Jumbo Limits Increase in 2018?
As a result of these trends, the jumbo loan threshold in King County could go up in 2018. Federal housing regulators review FHA and conventional / conforming limits every year, to make sure they are keeping pace with home values. When prices rise considerably during the year, the limits are often increased as well. We saw this last year, and it could happen again for 2018.
King County home prices are expected to continue rising over the coming months, though they could slow down a bit. The economists at Zillow, for example, recently predicted that the median house price in the county would rise by around 6% over the next 12 months (ending in October 2018).
Here is a full list of loan limits for the state of Washington. We will update that page in November or December. That’s when housing regulators will announce any revisions for 2018.