If you are looking to purchase a home in California, it is important to be aware of the conventional mortgage loan limits for 2018. The conventional mortgage loan limits for 2018 in California are the maximum amount of money borrowers can receive to finance home purchases through a lender that receives federal protection for the money being lent. We welcome you to use our free online tool in order to see the maximum loan amount you could qualify for based on the zip code you are looking to purchase a home in:
2018 MORTGAGE LOAN LIMITS FOR CONVENTIONAL, FHA, & VA LOANS
Mortgage loan limits for every Californian county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)
This does not mean borrowers looking for luxury homes do not have financing options. In fact, jumbo loans are currently very popular financing options in San Diego and statewide . However, lenders dealing in jumbo loans lose the federal protections granted to them by adhering to conventional mortgage loan limits. In order to help you learn about the loan limits of each federally backed lender, let’s take a look at the conventional mortgage loan limits for 2018 in California….
2018 Fannie Mae Loan Limits in California
Fannie Mae and its counterpart, Freddie Mac, are two of the most well-known federally backed mortgage buyers in the United States. Although they are each autonomous companies, both were established by the federal government to help regulate and boost the housing market. They both provide financing for mortgage lenders ranging from large commercial finance companies to smaller “thrift” banks.
In November of 2017, the Federal Housing Finance Agency (FHFA) announced an increase in the 2018 Fannie Mae loan limits in California. As a result, Fannie Mae and Freddie Mac loan limits in 2018 rose to $453,100 for a single-unit family home, which was an increase of $29,000 from the previous calendar year.
- However, because California is considered a high-cost area, the 2018 Fannie Mae loan limits in California for a single-unit family home are $679,650 (in the most expensive counties), which is 150% of the general mortgage limit for normal-cost areas
This means lenders and borrowers can remain within the Fannie Mae and Freddie Mac loan limits in 2018 while receiving up to $680,000 for a home purchase. Of course, this figure represents the highest amount possible, and not necessarily the amount every borrower will qualify for. In order to know what amount you might qualify for, we welcome you to contact us so we can discuss your individual situation and unique needs.
2018 FHA Loan Limits in California
The Federal Housing Administration (FHA) is an officially authorized United States government agency. It was founded in 1934 as the result of the banking crisis leading the Great Depression. Its original purpose was to regulate interest rates and mortgage terms. Today, the FHA sets standards for construction and underwriting, and it also insures loans made by private lenders and banks for building homes.
Just like Fannie Mae and Freddie Mac, the 2018 FHA loan limits in California have increased. The 2018 FHA loan limits in California vary by county, but home buyers in San Diego County (including the greater San Diego and Carlsbad areas) can receive up to $649,750 dollars toward the purchase of a single-unit family home. If you would like to see a comprehensive list of maximum mortgage loan amounts by county in the state of California, please click here.
2018 VA Home Loan Limits in California
The Department of Veterans Affairs (VA) provides patient care and federal benefits to veterans and their dependents. Unlike FHA and Fannie/Freddie loans that are available to just about every qualifying homebuyer in the United States, the VA has stringent requirements for who is eligible to receive home loans. For those who qualify, VA home loans are extremely popular because of the generous terms and conditions granted to those who have served and sacrificed so much of themselves to ensure our freedom.
- To learn more about the VAs requirements, and to see if you qualify for a VA home loan, please click here.
However, and just like the FHA and Fannie Mae-Freddie Mac, the 2018 VA home loan limits in California have increased from the previous year. This increase is the same amount the FHFA authorized for Fannie Mae and Freddie Mac, or $453,100 (up from $424,100 in 2017).
Along these lines, 2018 VA home loan limits in California reflect the FHFAs designation of the Golden State as a high-cost area. This means borrowers in San Diego can receive up to $649,750 toward a single-unit family home purchase. Eligible borrowers interested in purchasing multi-family unit housing as in investment property can also benefit from VA home loans.
Of course, 2018 VA home loan limits in California are based on county, and you can learn more about the maximum amount available in each county here.
Getting a Jumbo Loan in California
What about borrowers who want to finance a high-end luxury home priced out of the range of conventional mortgage lenders? As we already mentioned, securing a jumbo loan in California is an option. A jumbo loan is a mortgage higher than the conforming limits set by the FHFA for Fannie Mae-Freddie Mac, FHA and the VA loans. But like FHFA secured loans, jumbo loan limits vary based on location and dwelling type (so single-unit, multi-unit, etc.)
A lack of government guaranteed backing means a mortgage lender offering a jumbo loan in California can set requirements that differ from other jumbo loan lenders, as well as from the conventional mortgage lenders we have discussed. However, some of the more typical requirements to get a jumbo loan in California include:
- A 20% down payment for the best interest rates
- A FICO score of at least 700 to get good interest rates and terms
- A debt to income ratio of around 38-50%
- A 2 million dollar loan ceiling (with 3 million dollars possible on a case-by-case basis)
- Mandatory mortgage insurance on loan-to-value (LTV) above 85% to 90%
This list is very general and not by any means exhaustive. Therefore, if you are considering getting a jumbo loan in California to purchase a high-end luxury home, we welcome you to contact us to discuss your specific goals and needs in more detail.
San Diego Purchase Loans is Here to Help
At San Diego Purchase Loans, our mission is to help educate our clients so they can make informed, responsible decisions throughout the homebuying process. We want to help you get the best possible rates, terms and conditions on federally-backed conventional, as well as jumbo mortgage loans that help your home-buying dreams become reality.
San Diego Purchase Loans is proud to be a locally vested company serving our fellow San Diegans in this wonderfully diverse city we call home. If you would like to discuss your needs and goals with us, we welcome you to contact us to schedule an appointment over the telephone or in-person.