New Utah home loan limits

Dec. 2, 2021

A change to 2022 home loan limits will go a long way in helping home buyers who are dealing with the price increases of the past year.

The Federal Housing Finance Agency (FHFA) announced Tuesday that the cap for conventional loans will increase substantially in 2022. This change will help home buyers secure mortgages at the lowest rates.

For most counties in Utah, the limit for one-unit properties rose to $647,200 — that’s up nearly $100,000 from this year’s baseline of $548,250. For the high-cost areas of Summit and Wasatch counties, the limit is even higher at $970,800 versus $817,650 in 2021.

Oftentimes, the limits increase only slightly from year to year; however, the 2022 caps take into account 2021’s unprecedented housing market.

“Compared to previous years, the 2022 Conforming Loan Limits represent a significant increase due to the historic house price appreciation over the last year,” said FHFA Acting Director Sandra L. Thompson in a prepared statement. “While 95 percent of U.S. counties will be subject to the new baseline limit of $647,200, approximately 100 counties will have conforming loan limits approaching $1 million.”

FHFA regulates Fannie Mae and Freddie Mac and sets limits for the loan amounts that the two organizations can acquire. The limits are adjusted each year based on changes in the average U.S. home price. For buyers who need mortgages that exceed these limits, jumbo mortgages are available but typically at a higher cost.

“Fannie Mae and Freddie Mac are critical to providing funding to the housing market as we’ve seen throughout the pandemic and decades before it,” said Leslie Rouda Smith, president of the National Association of Realtors in a prepared statement. “The FHFA’s actions will continue to ensure liquidity for home purchase market.”

FHA 2022 loan limits

Other important mortgage loan limits are the ones set for FHA-insured mortgages. The Federal Housing Administration recently announced these limits would also increase for 2022.

In Utah, the lowest limit is $420,680. This applies to all counties except those listed below:

  • Rich: $447,350
  • Washington: $481,850
  • Utah and Juab: $508,300
  • Salt Lake and Tooele: $523,250
  • Box Elder, Davis, Morgan, Weber: $646,300
  • Summit and Wasatch: $970,800

That’s up from 2021’s floor of $356,362 and ceiling of $817,650.

Rising home prices

The increase in loan limits, both for conventional and FHA mortgages, is a big win for home buyers, especially in Utah where prices have increased at some of the highest rates in the country.

According to a separate FHFA report released this week, Utah home prices increased 30% between the third quarters of 2020 and 2021. Utah’s appreciation is second only to Idaho where prices rose nearly 36%.

The Mountain census division (which includes Utah) increased 25%, and home prices for the entire country rose a record 18.5%.

“House price appreciation reached its highest historical level in the quarterly series,” said William Doerner, FHFA supervisory economist. “Compared to a year ago, annual gains have increased in every state and metro area. Real estate prices have risen exceptionally fast, but market momentum peaked in July as month-over-month gains have moderated.”

FHFA also ranks 100 of the nation’s largest metropolitan areas by annual home price appreciation. Salt Lake City came in sixth on this list with home prices rising 28%.

“FHFA is actively evaluating the relationship between house price growth and conforming loan limits, particularly as they relate to creating affordable and sustainable homeownership opportunities across all communities,” Thompson said.

To learn more about mortgages and local home prices, contact a mortgage lender and Realtor in your area.