Home prices in the Seattle metro area have risen quite a bit over the last year or so. As a result, federal housing officials recently announced that the conforming mortgage loan limit for the Seattle area will be increased for 2019.
For all cities within King, Pierce and Snohomish counties, the 2019 conforming loan limit will go up to $726,525 in 2019. That’s for a single-family home purchase. There are higher limits for multi-family properties like duplexes and triplexes.
Seattle Loan Limit Will Be Increased for 2019
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 2019, the conforming loan limit for a single-family home in the Seattle metro area will go up to $726,525. That’s an increase of nearly $60,000 from the 2018 cap of $667,000.
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.
Beyond the Seattle metro area, the 2019 loan limit for most other Washington counties will go up to $484,350 next year.
To be clear: Qualified borrowers with sufficient income can usually borrow more than the 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 2019 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 is occurring from 2018 to 2019.
But it’s not just Seattle that will see higher mortgage loan limits in 2019. In fact, most counties across the country will be adjusted upward next year, in response to rising home values.
According to a November 27 press release from the Federal Housing Finance Agency (FHFA):
“…the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018.”
The median home value in Seattle is now slightly higher than $700,000, 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 will see higher loan limits in 2019.
Related: Washington vs. Oregon home prices
VA Loan Limits Will Likely Rise As Well
During 2018, the Department of Veterans Affairs used the FHFA’s conforming limits for the VA home loan program. We expect they will do the same in 2019. But at the time this article was published, there was no official announcement from the VA yet. It’s likely forthcoming.
We will publish another update specific to VA loans when that announcement comes. We also expect to see revised limits for the FHA mortgage loan program as well. Those are usually announced toward the end of December.