Fannie Mae and Freddie Mac raise mortgage loan limits

Fannie Mae and Freddie Mac will boost their maximum loan limits to at least $766,500 in California in January – and as much as $1.15 million in high-cost areas such as the Bay Area and Orange County.

The Federal Housing Finance Agency, the agency that oversees Fannie and Freddie, approved the 5.56% bump in November, following the nationwide home price increase during the past year.

In California, rural counties – think Kings and Shasta counties – will follow the nationwide maximum limit of $766,500, easily covering the median home price in those regions. 

The statewide median home price – meaning half the homes sold for less, the other half for more – was $822,000 in November, according to the California Association of Realtors (CAR). About 70% of the markets that CAR tracks had a median home price of less than $766,500.

However, in higher-priced areas, such as Irvine and San Jose, the Federal Housing Finance Agency approved the higher $1.5 million limit in pricier areas – double the maximum conforming limit.


The California Association of Realtors has repeatedly lobbied the federal government to boost the maximum conforming loan limits to more accurately reflect home prices in the Golden State. And Uncle Sam, in an ongoing effort to help everyday families become homeowners, has favored increasing limits.

Fannie- and Freddie-backed mortgages account for almost three of every four mortgages, according to Black Knight. 

Home loans that exceed the maximum conforming loan limit are jumbo loans and are not insured by the Federal Housing Finance Agency. Jumbo loans often have slightly higher interest rates than Fannie- or Freddie-insured mortgages, but not always.

You can check out the county-by-county maximum conforming loan limits on the FHFA website.

(Photo of Freddie Mac headquarters by Shutterstock)

The average homeowner in California enjoyed a $51,000 boost in equity during the third quarter
The average homeowner in California enjoyed a $51,000 boost in equity during the third quarter.

Own a home? Feeling richer? You should

Booming demand, despite higher mortgage rates, coupled with declining inventory has given California homeowners some equity swagger.

The average homeowner in California enjoyed a hefty $51,000 increase in equity during the third quarter compared to a year ago, easily the most in the nation, according to CoreLogic.

Despite the steady increase in mortgage rates during the past 18 months, California homebuyers have outpaced the number of homes on the market, often giving homeowners some solid equity gains.


But other states, especially a handful in the West, have reported better year-over-year equity gains than California in recent quarters. Those states’ home prices have cooled, with Texas and Utah homeowners experiencing a slight drop in equity. 

“With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year,” said Dr. Selma Hepp, chief economist for CoreLogic. “And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.”

Massachusetts had the second-highest equity increase at $45,000, followed by Rhode Island and Connecticut at $43,000 and $42,000 respectively. 

Texas and New York had the largest equity declines at $9,000 and $8,000.

downtown fresno
Fresno County home prices have increased 5.6% to $415,000 during the past year. But the fast-growing city in the heart of the Central Valley is among the riskiest for homeowners. SHUTTERSTOCK

Central Valley is at-risk central in California

Five counties in the Central Valley, from Fresno to Stockon, are considered among the 50 most at-risk housing markets in the nation.

The counties – also among the most affordable in California – had a trio of potential trouble with higher-than-average foreclosure rates, underwater mortgages and unemployment rates, according to ATTOM Data.

Of course, the nation’s most at-risk markets also come with a dose of reality: A large majority of homeowners have a ton of equity and are highly unlikely to default and lose their homes. And while the jobless rate has been inching higher, employers continue to be in the driver’s seat when it comes to the job market in the state.

The five California counties with the biggest challenges are Fresno County, Madera County – just north of Fresno – Merced County, San Joaquin County (better known as Stockton-Lodi, and Stanislaus County, where Modesto is the largest city.


“Some parts of the country continue to pop up on the radar as places to watch for signs of housing market drop-offs, based on key quarterly measures,” says Rob Barber, CEO of ATTOM. 

Some other California communities to keep an eye on are Butte County, just north of Sacramento; El Dorado County, just east of Sacramento; Humboldt County; and Kern County, best known for Bakersfield. The Inland Empire – Riverside and San Bernardino counties – also made the most at-risk top-50 list.

“Once again, it is important to stress that getting onto the most vulnerable list doesn’t signal an imminent crash for any local market,” Barber says. “It just means that they have greater potential tripwires that could lead to a decline. Those remain areas to watch, especially given the overall varied trends in the market.”