Summary: Home prices in the Seattle metro area have risen quite a bit over the last year or so. As a result, federal housing officials increased conforming mortgage loan limits for the Seattle area for 2020. This article will provide more details about what this year’s conforming loan limits are.
For all cities within King, Pierce, and Snohomish counties, the 2020 high balance conforming loan limit will go up to $741,750 in 2020. That’s for a single-family home purchase. There are higher limits for multi-family properties like duplexes and triplexes.
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Seattle Loan Limit Will Be Increased for 2020
A “conforming” loan is one that meets or conforms to the size requirements used by Fannie Mae and Freddie Mac.
Those are the two government-sponsored enterprises (GSEs) that purchase loans from mortgage lenders.
- When a home loan falls within the size limits used by the GSEs, it is referred to as a conforming loan.
- If it exceeds those limits, it’s known as a jumbo loan.
Borrowers seeking a jumbo loan often have to meet stricter criteria, due to the higher amount of money being borrowed.
In 2019, the threshold that separates conforming and jumbo loans in Seattle will be increased due to rising home values. In 2020, the high balance conforming loan limit for a single-family home in the Seattle metro area will go up to $741,750. That’s an increase of nearly $15,225 from the 2019 cap of $726,525.
These limits are usually consistent across metro areas. So in the case of Seattle, this means that King, Pierce and Snohomish counties all have the same loan limits.
The standard conforming loan limit across the country including the Seattle metro area for 2020 has moved up to $510,400 from $484,350 in 2019.
To be clear: Qualified borrowers with sufficient income can usually borrow more than the high balance conforming loan limit for their county. That would be a “jumbo” mortgage scenario.
Higher Home Prices, Higher Mortgage Amounts
The increase in Seattle’s loan limits for 2020 is a direct result of significant home-price appreciation that occurred over the last year. These limits are reviewed annually in relation to home values. When the median house price for a particular area rises substantially within a year, federal housing officials typically increase the loan limits to keep pace. That’s what occurred from 2018 to 2019.
But it’s not just Seattle that saw higher mortgage loan limits in 2020. In fact, most counties across the country have been adjusted upward, in response to rising home values.
According to a recent press release from the Federal Housing Finance Agency (FHFA):
“…In most of the U.S., the 2020 maximum conforming loan limit for one-unit properties will be $510,400, an increase from $484,350 in 2019.”
The median home value in Seattle is now about $767,900, according to Zillow. And while prices appear to be leveling off a bit, they are still significantly higher than last year. That’s why the metro area saw higher loan limits in 2020.
Related: Washington vs. Oregon home prices
VA Loan Limits Eliminated
Thanks to the Blue Water Navy Vietnam Veterans Act of 2019, VA loan limits have been eliminated for 2020. That means eligible veteran applicants can buy homes at higher prices without having to worry about going over a loan limit and foregoing their zero down payment option.
Now, veterans can still take advantage of no money down without the concern of going over a loan limit.
However, those who have more than one current VA loan or who defaulted on a previous loan will still have loan limits applied to them.
Need a Home Loan?
Will you need mortgage financing to buy a home in Seattle? We can help. Sammamish Mortgage has been serving buyers across Washington, Oregon, Idaho, and Colorado since 1992. We offer a wide variety of mortgage programs with flexible qualification criteria. Please contact us today with any financing-related questions you have.