Effective April 2018 Sammamish Mortgage has expanded our high balance conforming loans to $679,250 regardless of the county loan limit. This allows our clients to avoid the tighter loan guidelines and higher rates and costs generally associated with Jumbo Loans including options with less than 20% down.
Oregon jumbo loan limits will go up in 2018, in response to rising home prices. In most counties across the state, anything above $453,100 will be considered a jumbo loan. The one exception is Hood River County, where the new threshold is set at $454,250.
Oregon Jumbo Loan Limits in 2018
The Federal Housing Finance Agency (FHFA) announced in November 2018 that it would be increasing the conforming loan limit for Fannie and Freddie home loans in just about every part of the US to $484,350 from $453,100 in 2018. That’s a jump of nearly 7 percent.
According to the FHFA, the maximum conforming loan limit will be higher in 2019 as a result of generally rising home values [in 2018]. Among other things, this means that the jumbo loan limit for Oregon will be higher in 2019 than it was in 2018.
The Housing and Economic Recovery Act of 2008 determines the conforming loan limits, which mandated that the baseline loan limit would not be increased again until home prices return to pre-recession decline levels.
But home prices are steadily increasing, prompting another increase in the conforming loan limit.
This year, every county in Oregon will have a conforming loan limit of $484,350.
Related: Portland maximum mortgage size
A Response to Home Price Gains
This increase comes on the heels of major home-price gains that occurred over the last couple of years. Home prices across the Pacific Northwest have risen at a faster pace than the national average in recent years.
Depending on the source, house values in Oregon rose somewhere between 7% and 9% over the last 12 months (ending in November 2018). That’s much higher than the national average for the same time, as well as the historical annual average going back several decades. As a result of these trends, Oregon will see a higher jumbo loan threshold in 2019.
Currently, the median home price in Oregon is $340,027, with prices experiencing an average annual growth rate of 8.6 percent since 2013. That said, home values can range wildly from one jurisdiction to the next, with Medford’s median home price at $283,699 and Portland’s at $464,496, for example.
Frequently Asked Questions About “Big” Mortgages
The whole concept of loan limits can be pretty confusing, especially for first-time home buyers in Oregon who are not familiar with the terminology. And the concept of “jumbo loans” and “conforming limits” can further confuse things. Here’s a quick overview:
What is a “conforming loan?”
A conforming loan is a mortgage that is equal to or less than the amount set by the conforming loan limit established by the FHFA and meets the funding requirements of Freddie Mac and Fannie Mae. The limits vary by county because of the wide fluctuations in housing prices from one jurisdiction to the next.
What is a jumbo loan?
As explained above, a jumbo mortgage loan is one that exceeds the conforming limits established by the Federal Housing Finance Agency. These size restrictions apply to loans that can be sold to Freddie Mac and Fannie Mae via the secondary mortgage market. When a home loan exceeds these limits, it is referred to as a jumbo mortgage.
What are the qualification requirements?
The requirements for borrowers seeking a jumbo loan in Oregon are similar to those used for smaller conforming home loans. Borrowers must have good credit and a demonstrated ability to repay their debts. Income is a key distinction here. Jumbo borrowers must have sufficient income to manage the monthly payments for their loan, along with all other recurring debts. So these mortgage products are typically used by people with comparatively higher income levels, due to the larger size of the loan.
Do jumbo loans have higher interest rates?
You might think that a jumbo mortgage product would have a higher interest rate, since there’s a larger amount of money being borrowed. But it’s often the other way around. Over the last few years, jumbo loans (that exceed conforming limits) have had lower average rates than their smaller conforming counterparts. This is the result of investor demand and other factors. But the bottom line is that borrowers who use jumbo loans in Oregon often qualify for lower rates.