Fannie Mae’s higher loan limits come just in time for a 5% off purchase

Loan Officer: John Holmgren, Holmgren & Associates / Finance of America Mortgage.

Purchase price: $ 857,000

Type of loan: 30-year fixed rate loan.

Loan amount: $ 814,150.

Rate: 2.875% without points.

This first time buyer had been looking for an affordable home for several years, hoping to buy in San Francisco since she is a software engineer working in San Francisco, acknowledging that her price range her housing options would be limited to condominiums. The two main hurdles were the high prices in San Francisco combined with its limited down payment. Funding options are very limited for those with less than 20% to deposit when the amount borrowed exceeds Fannie Mae’s maximum loan amount, which was $ 765,600 for most Bay Area counties in 2020 .

This buyer’s agent, Betty Rajabi of Sotheby’s International Realty in Berkeley, had urged her to consider East Bay because of the increased accessibility. At the end of November, as the buyer became receptive to this option due to the desire for more space in this work-from-home environment, Rajabi found a perfect home for buyers’ needs, but still a little out of reach. from a financial perspective, because a 5% down payment would produce a loan amount greater than the Fannie Mae limit of $ 765,600.

Rajabi contacted me to review financing options for his buyer and I was pleased to inform him that Fannie Mae’s loan limit had just been increased to $ 822,375 so that the buyer could proceed with a house offer with its down payment of 5%. Our company started making loans at the new limit as soon as it was announced.

While Fannie Mae loan rates are now comparable to jumbo loan rates, Fannie Mae loans have the advantage of allowing as low as 5% down payment (sometimes less) and much lower cash reserve requirements. , in addition to allowing lower debt ratios and credit scores. In this case, the key feature was the ability to put in 5% of funds, allowing that buyer to become the owner.


John Holmgren, Holmgren & Associates / Finance of America Mortgage, 510-381-1961, [email protected]


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