If you want to buy a home with a conforming loan, you must borrow within the Fannie Mae and Freddie Mac conforming loan limits. Every year, the government reevalutates these limits and adjusts them as necessary for each county. The Federal Housing Finance Agency (FHFA) has announced the loan limits for 2022, which have increased over those for the past year.
That is excellent news for homebuyers in Michigan, who can now borrow more money to finance a home purchase while still qualifying for a conforming mortgage.
Regarding its basis for its adjustments, FHFA writes, “According to the nominal, seasonally adjusted, expanded-data FHFA HPI [report], house prices increased 18.05 percent, on average, between the third quarters of 2020 and 2021. Therefore, the baseline [conforming loan limits] CLL in 2022 will increase by the same percentage.”
What Are The Conforming Loan Limits for 2022?
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In some high cost areas in the contiguous states, there are also higher loan limits.
What are the Conforming Loan Limits for 2022 for Michigan?
The entire state of Michigan shares the baseline conforming loan limits starting with $647,200 for a single unit. There are no higher cost counties in the state that feature higher loan limits.
Do You Need a Jumbo Mortgage?
So, say you are buying a single unit home in Michigan. If you are borrowing no more than $647,200, then you can use a conforming loan. If you need to borrow above that amount, then you need a non-conforming jumbo loan. If you are buying a two unit home, you can do so with a conforming loan so long as you do not need to borrow above $828,700, and so on.
Either way, a strong credit score, debt-to-income ratio and income level can qualify you for a flexible and affordable mortgage product. It is worth noting that the increase in conforming loan limits from 2021 to 2022 was dramatic. The limit for a single unit home in 2021 was $548,250. To understand how that impacts you, let’s say you were looking to borrow $620,000. If you tried to do that last year, you would need a jumbo loan. But if you want to do it this year, then you can apply for a conforming loan. That means a faster, easier qualification process.
Buy a Home in Michigan With a Conforming or Non-Conforming Loan Now
Have questions about what type of mortgage to apply for? We can assist you with calculating all the possible mortgage options and offer personalized recommendations. We can also help you look into government-backed programs like FHA, VA and USDA loans. To get started, please call MMS Mortgage Services today at (248) 788-0800 to schedule your consultation.