- In 2022, you can borrow up to $647,200 with a conforming loan in most parts of the US.
- In areas with a higher cost of living, you may be able to borrow up to $970,800.
- To borrow more than the FHFA allows for conforming loans in 2022, consider applying for a jumbo loan.
- See Insider's picks for the best mortgage lenders »
What are the conforming loan limits for 2022?
Each year, the Federal Housing Finance Agency (FHFA) adjusts the amount you can borrow with a conforming loan , which is probably what you think of as a "regular mortgage."
In 2022, the borrowing limit for a single-unit home in most parts of the US will be $647,200. In more expensive parts of the country — such as Alaska, Hawaii, Guam, and the US Virgin Islands — the limit increases to $970,800.
These limits have gone up since 2021. The single-unit borrowing limit in 2021 was $548,250 in most parts of the country and $822,375 in high-cost areas.
These are the borrowing limits for single-unit homes, but you can borrow more for two-unit, three-unit, and four-unit homes. To see the limit in your city, look at the county-by-county guide on the FHFA website .
What to do if you don't qualify for a conforming loan in 2022
If you want to borrow more than the FHFA allows in 2022, a jumbo loan may be an option. Jumbo loans are simply mortgages for people who need more than the FHFA normally allows. They typically have stricter eligibility requirements and higher interest rates than conforming loans. Jumbo loans are riskier for lenders, so companies make it harder to qualify to decrease the likelihood of a borrower defaulting on payments.
Each lender has its own requirements for jumbo loans, but you'll probably need a higher credit score , lower debt-to-income ratio , and bigger down payment than you would for a conforming loan. Expect to need at least a 700 credit score and 20% or more for a down payment. You also may need a debt-to-income (DTI) ratio of 36% to 45% .
The better your credit score, DTI ratio, and down payment, the more you may be approved to borrow with a jumbo loan.
What if your credit and debt profiles aren't strong enough for a conforming or jumbo loan? You may want to apply for an FHA mortgage , which is for people with credit scores as low as 580 and a DTI ratio of 43% or lower. The borrowing limit depends on where you live, and you can find the limit for your county here .
You may qualify for a VA mortgage if you're a military member, or a USDA mortgage if you're buying in a rural area. Neither of these types of home loans requires a down payment. VA mortgages do not have a borrowing limit, and USDA mortgages usually have the same limits as conforming loans.
Via PakApNews