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California Loan Limits Have Increased for 2023, Due To Price Growth

Earlier today, the Federal Housing Finance Agency (FHFA) announced they would be increasing the conforming loan limits for all California counties in 2023. This means borrowers will have a higher financing range to work with, without having to use a jumbo loan. But jumbo mortgage products are still available for those who need them.

In 2023, the conforming loan limits for California counties will range from $726,200 up to $1,089,300. The San Francisco Bay area, where we are located, is one of those areas that will have the maximum conforming mortgage size of $1,089,300.

Higher Conforming Loan Limits for California

A conforming loan is one that meets the purchase requirements used by the government-sponsored mortgage buyers Freddie Mac and Fannie Mae. One of those requirements has to do with the amount being borrowed. A mortgage loan can only be sold to Freddie Mac or Fannie Mae if it meets certain size limits, which are known as “conforming loan limits.”

In 2023, the loan limits for all California counties have been increased due to home-price growth over the past year. These limits are based on median home values within a particular county. So whenever home prices rise substantially from one year to the next, housing officials typically increase the loan limits as well.

As mentioned above, the 2023 California conforming loan limits will range from $726,200 up to $1,089,300, for a single-family home. Counties that have a higher median house values also have higher maximum mortgage limits, and vice versa.

The table below shows the maximum conforming mortgage amount for all California counties in 2023. These numbers apply to single-family home purchases in particular. You can find the limits for multifamily properties, like duplex and triplex residences, on the FHFA websites.

ALAMEDA $1,089,300
ALPINE  $726,200
AMADOR $726,200
BUTTE $726,200
CALAVERAS $726,200
COLUSA $726,200
CONTRA COSTA $1,089,300
DEL NORTE $726,200
EL DORADO $763,600
FRESNO $726,200
GLENN $726,200
HUMBOLDT $726,200
IMPERIAL $726,200
INYO $726,200
KERN $726,200
KINGS $726,200
LAKE $726,200
LASSEN $726,200
LOS ANGELES $1,089,300
MADERA $726,200
MARIN $1,089,300
MARIPOSA $726,200
MENDOCINO $726,200
MERCED $726,200
MODOC $726,200
MONO $726,200
MONTEREY $915,400
NAPA $1,017,750
NEVADA $726,200
ORANGE $1,089,300
PLACER $763,600
PLUMAS $726,200
RIVERSIDE $726,200
SAN BENITO $1,089,300
SAN DIEGO $977,500
SAN FRANCISCO $1,089,300
SAN JOAQUIN $726,200
SAN MATEO $1,089,300
SANTA BARBARA  $    805,000
SANTA CLARA $1,089,300
SANTA CRUZ $1,089,300
SHASTA $726,200
SIERRA $726,200
SISKIYOU $726,200
SOLANO $726,200
SONOMA $861,350
SUTTER $726,200
TEHAMA $726,200
TRINITY $726,200
TULARE $726,200
TUOLUMNE $726,200
VENTURA $948,750
YOLO $763,600
YUBA $726,200

Higher Prices Bring Higher Mortgage Amounts

The higher loan limits being introduced for 2023 are the direct result of home-price growth over the past year or so. While home prices have leveled off in most cities across California, they rose substantially going into the first part of 2022.

To keep up with this trend, housing officials have increased the maximum conforming loan amount for 2023. This gives borrowers a higher range of financing to work with, while staying within the “conforming” range.

According to the November 29 announcement:

“The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022.​”

According to Zillow, the median home value in California increased by around 7% over the past year. Earlier in 2022, the year-over-year price gains were even more substantial. Home values rose in most other counties across the country as well, prompting federal housing officials to increase conforming loan limits nationwide.

Jumbo Mortgage Financing Still Available

Home buyers who need to obtain a mortgage loan that exceeds the 2023 loan limits shown above will still be able to do so, as long as they have the income to support it.

When you borrow more than the maximum conforming mortgage amount for your particular county, it’s known as a “jumbo” home loan. These larger loans cannot be sold to Freddie Mac or Fannie Mae through the secondary mortgage market, so they often come with stricter qualification criteria. For instance, you might need to make a larger down payment when using a jumbo loan, along with having a solid credit history.

Jumbo mortgage loans are quite common in California, especially in the San Francisco Bay area where home prices far exceed the national average. We provide jumbo mortgage financing to our clients on a regular basis, since many of those clients are located in the Bay Area.

So don’t be discouraged by the official conforming “limits” shown above. If you have sufficient income and good credit, you might be able to borrow more than those limits by using a jumbo mortgage product. We offer this type of financing to home buyers all across the state of California. So please contact us if you have questions about it.

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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