Solano County Conforming & FHA Loan Limits for 2021

Home values in Solano County, California have increased over the past year or so. As a result of this trend, federal housing officials will be raising the FHA and conforming loan limits for Solano County in 2021.

Starting in January of 2021, the FHA and conforming loan limit for a single-family home will go up to $550,850. Multi-family properties, such as duplexes, have higher caps. You’ll find them all below, along with some other helpful information.

2021 Loan Limits for Solano County, California

Federal housing officials recently announced that the loan limits for Solano County, California would be increased for 2021 in response to rising home prices. See the bullet points below.

Additionally, both FHA and conforming conventional mortgage loans will have the exact same limits in 2021. That’s noteworthy, because it hasn’t always been that way in the past. In 2020, for example, the FHA and conforming loan limits for Solano County were slightly different. But starting in 2021, they’ll be the same. That makes things a little less confusing, for borrowers.

Here are the 2021 loan limits for Solano County (both FHA and conforming):

• One-family: $550,850
• Two-family: $705,200
• Three-family: $852,400
• Four-family: $1,059,350

Note: The “one-family” limit of $550,850 applies to regular single-family properties with just one residence (a.k.a., a single-family home). The other three categories apply to multi-family properties, the kind that are often purchased by investors. If you’re a “regular” home buyer purchasing a typical house or condo in Solano County, the $550,850 limit applies.

These limits were increased due to home-price growth that occurred over the past year. This is true for FHA and conforming alike. They’ll both be rising in 2021.

FHA vs. Conventional: A Quick Refresher

FHA. Conforming. Conventional. What does it all mean? Mortgage programs can be a bit confusing, especially when you’re new to it. Here’s a quick refresher on these terms.

• FHA: The Federal Housing Administration’s home loan program is primarily geared toward low- to moderate-income borrowers seeking a relatively low down payment. FHA loans are insured by the federal government. As a result, the qualification criteria for borrowers can be a bit more lax.
• Conforming: This term refers to a regular or “conventional” home loan that is not insured by the government. Depending on their size, conventional loans can either be conforming or jumbo. A conforming mortgage can be sold to Freddie Mac or Fannie Mae, while a jumbo loan cannot. (See the next section below for more on this subject.)

It bears repeating: In 2021, the conforming and FHA loan limits for Solano County will be the same. Both caps will be set at $550,850, for a single-family property. That’s the magic number, so to speak, above which you cross into jumbo mortgage territory.

Related: View FHA caps for all California counties

Jumbo Mortgages & ‘Piggyback’ Financing

Starting in 2021, a conforming conventional loan in Solano County is anything up to $550,850 (for a single-family property). Anything above that amount is considered a jumbo mortgage loan. Jumbo mortgages often bring stricter criteria for borrowers, due to the larger amount being borrowed and higher risk level.

If you need to borrow more than the 2021 conforming loan limits for Solano County, you have a couple of options:

1. You could use a jumbo loan, as explained above. Borrowers pursuing this option need to have solid credit and sufficient income. Just know that this is an option.
2. You could also combine a first and second mortgage, so that neither one exceeds the county’s conforming limit of $550,850. This is a popular financing strategy, especially when it comes to higher-priced homes. This strategy is also referred to as a piggyback mortgage. (Follow the links to learn more about these options.)

Solano County Home Prices Continue Climbing

Home prices in Solano County, California have risen steadily throughout 2020, despite the economic restrictions brought on by the coronavirus pandemic. The same is true for most other counties in California, and elsewhere across the nation.

According to a November 2020 report from the California Association of Realtors, the median sale price for existing single-family homes in Solano County rose by 8.1% from October 2019 to October 2020.

Home values in the area are expected to continue climbing, as we move into 2021. A recent forecast from the real estate data company Zillow predicted that house values in Solano County “will rise 7.5% in the next year.” That forecast was issued in mid-December 2020.

Questions? As a borrower, you have a lot of options when it comes to mortgage financing. We can help you make sense of it all. Based in Walnut Creek, Bridgepoint Funding has been meeting the mortgage needs of Bay Area home buyers and homeowners for nearly 20 years. Contact us today with any financing questions you have!