There was big news in the mortgage industry for U.S. homebuyers last week.

If you are in the market in 2017 for a conventional loan, you just got a boost. The total amount that qualifying borrowers can receive recently increased by 1.7%.

FHFA, the Federal Housing Finance Authority, increased this week the ceiling loan amount for conforming loans for most counties in the United States. The increased limits will go into effect starting in January 2017.

It is the first increase since 2007. A conforming (or conventional) loan “conforms” to the Freddie Mac and Fannie Mae underwriting guidelines. These loans are then sold on the secondary mortgage market. Their uniformity of underwriting is required so that they can be sold easily in packages between investors.

New maximum conforming loan amounts are now $424,100 from the previous $417,000 limit. Loans above this limit are called “jumbo” loans.

These new limits cover most counties in the nation including Maricopa and Pinal. All 15 counties in Arizona receive the same new limits with this upward revision. This means that all areas of the Phoenix metro including Mesa, Glendale, Scottsdale, Chandler, Gilbert and Tempe are included.

The updated $424,100 loan limit is for single-family homes only. Higher limits are available for 2,3 and 4-unit residences. For example, the new 2017 conforming loan limits for a 2-unit are $543,000, a 3-unit is $656,350 and the high loan limit on a 4-unit financed through Freddie Mac or Fannie Mae is $815,650.

The decision to increase the limit comes with rising home values that had previously tanked after the U.S. housing crisis. Prices in 2016 have shown continued appreciation in Arizona and nationwide. The FHFA made the decision to announce the upcoming increase in the conforming loan limits in Q3 2016 because of the strength of U.S. home prices.

The FHFA tool used to calculate residential home price appreciation is called the HPI, or Home Price Index. This is the first time since Q3 2007 that the HPI values have exceeded pre-crash levels.

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