2021 Conforming Loan Limits In California

The 2021 Conforming loan limit in California has been increased.

On November 24, 2020 The Federal Housing Finance Agency (FHFA) announced they are raising the 2021 Conforming loan limits in California which is good news for homeowners and homebuyers. 

This allows some mortgage loans that were previously labeled “Jumbo” to now be placed in the Conforming loan limit category. Conforming loans in California generally come with better mortgage rates and easier underwriting requirements.

What Are The 2021 Conforming Loan Limits in California?

The Fannie Mae and Freddie Mac baseline Conforming loan limit in California is now $548,250 for most counties and in some high-cost counties, it’s as high as $822,375. Scroll down for your specific county limit.

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California Conforming Loan Limits 2021

Here are the 2021 Conforming limits for all 58 counties in California. “One-Unit” refers to a property with one structure (ie a Single Family Residence – SFR), “Two-Unit” is a Duplex, etc. Home values have increased over the last few years and raising the loan limits allows more people to qualify for the best available mortgage rates. The Federal Housing Finance Agency (FHFA) updates their conforming loan limits every year.

CONTRA COSTA$822,375$1,053,000$1,272,750$1,581,750
DEL NORTE$548,250$702,000$848,500$1,054,500
EL DORADO$598,000$765,550$925,350$1,150,000
LOS ANGELES$822,375$1,053,000$1,272,750$1,581,750
SAN BENITO$822,375$1,053,000$1,272,750$1,581,750
SAN BERNARDINO$548,250$702,000$848,500$1,054,500
SAN DIEGO$753,250$964,300$1,165,600$1,448,600
SAN FRANCISCO$822,375$1,053,000$1,272,750$1,581,750
SAN JOAQUIN$548,250$702,000$848,500$1,054,500
SAN LUIS OBISPO$701,500$898,050$1,085,550$1,349,050
SAN MATEO$822,375$1,053,000$1,272,750$1,581,750
SANTA BARBARA$660,100$848,050$1,021,450$1,269,450
SANTA CLARA$822,375$1,053,000$1,272,750$1,581,750
SANTA CRUZ$822,375$1,053,000$1,272,750$1,581,750
SIERRA$548,250$702,000$ 848,500$1,054,500

Rising Prices Bring Higher Limits In 2021:

At the end of 2020, federal housing officials increased the conforming loan limits for California; and in a November 24th, 2020 press release, the Federal Housing Finance Agency stated:

“Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021.  In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250, an increase from $510,400 in 2020″

Baseline Limit

“The Housing and Economic Recovery Act (HERA) requires that the baseline CLL be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third-quarter 2020 FHFA House Price Index (FHFA HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.  According to the seasonally adjusted, expanded-data FHFA HPI, house prices increased 7.42 percent, on average, between the third quarters of 2019 and 2020.  Therefore, the baseline maximum CLL it in 2021 will increase by the same percentage.”

Source: FHFA

Since 2008 the FHFA has used the HERA formula to calculate Conforming loan limits.

Conforming Loan Limits – Previous Years

Home values have increased over the last decade and raising the Conforming loan limits allows more people to qualify for the best available mortgage rates. The Federal Housing Finance Agency (FHFA) updates its conforming loan limits every year.

Here are the previous loan limits for years 2017 to 2020.

California Conforming Loan Limits, 2020

The California Conforming loan Limit in 2020 was $510,400 and in some high-cost counties, like Los Angeles, Orange, San Mateo, and Alameda) it was as high as $765,600.

California Conforming Loan Limits, 2019

The California Conforming Loan limit in 2019 was $483,350 and in some high-cost counties, like Los Angeles, Orange, and Alameda) it was as high as $726,525.

California Conforming Loan Limits, 2018

The California Conforming Loan limit in 2018 was $453,100 and in some high-cost counties, like Los Angeles, Orange, and Santa Clara) it was as high as $679,650.

California Conforming Loan Limits, 2017

The California Conforming Loan limit in 2017 was $424,100 and in some high-cost counties, like Los Angeles, and San Francisco) it was as high as $636,150.

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Conforming Loan Programs

Conforming loan programs are the most popular loan programs out there. Below we cover everything you need to know about Conforming loans, what type of Conforming loans are available, getting qualified and Conforming loans for people with less than perfect credit. Conforming loans usually have low mortgage rates at great terms.

At JB Mortgage Capital, Inc. we encourage people to ask questions and if you have any questions about Conforming loans please be sure to let us know.

What Is A Conforming Loan?

A Conforming loan is a mortgage loan that “conforms” to the underwriting standards of Fannie Mae or Freddie Mac. All Conforming loans go through an Automated Underwriting System (AUS) prior to an actual underwriter reviewing the file.

Conforming loan limits in California are the maximum loan amount a lender can lend under current Conforming guidelines.

A Conforming loan is a Conventional Loan and a Conventional loan is any mortgage loan that is not backed by the U.S. Government. FHA home loans and VA home loans are backed by the U.S. government and are not Conforming nor are they Conventional loans.

What Types Of Conforming Loans Are There?

The most popular Conforming loans are the 30-year Fixed-Rate Mortgage (FRM) loans and the 15-year fixed-rate loan. Most homeowners or homebuyers go with either a 30-year or 15-year fixed-rate program however there are many other options. Here is a full list of all the fixed-rate mortgage options with Conforming loan limits.

  • 30-year fixed-rate
  • 25-year fixed-rate
  • 20-year fixed-rate
  • 15-year fixed-rate
  • 10-year fixed-rate

There are no fixed rate options below a 10 year fixed rate. As for the Adjustable Rate Mortgages (ARM) under the Conforming loan program:

  • 5/1 Adjustable Rate Mortgage
  • 7/1 Adjustable Rate Mortgage
  • 10/1 Adjustable Rate Mortgage

All of the loan programs fit under the Conforming loan limits in California. The 10/1 ARM is the longest fixed-rate period under the Conforming loan ARM program. All Adjustable Rate Mortgages are based on a 30 year time period.

The first number (for example 5/1) is the number of years the interest rate is fixed and the second number represents how often the rate adjusts after the fixed-rate period. The fixed-rate period is always at the beginning. So a 5/1 ARM:

  • For the first five years, the interest rate is fixed and it does not change
  • For the first five years, your payment does not change
  • After the first five years, your rate adjusts once a year each and every year until year 30.
  • Your monthly payment adjusts once a year after the fixed-rate period.

Mortgage Pro-Tip About Mortgage Ads:

One of the most popular things in mortgage advertising is unscrupulous mortgage companies trying to make it seem like their advertised rate is a 30-year fixed-rate. It happens a lot and I wish it would stop because the average consumer can be easily tricked.

If you are working with a mortgage company that does this we suggest you find a new mortgage company. If they can’t be straight forward with what there advertising how can you expect them to be straight forward with providing you a low rate mortgage?

Some of the wording you’ll see in these deceptive ads are:

  • “Low rate on a 30-year loan”
  • “Low fixed rate on a 30-year loan”
  • “Lock in a fixed rate on a 30-year loan”

All of the above may seem like a 30-year fixed-rate loan to someone who is not in the mortgage industry or someone with limited to no experience buying a home however to an experience professional the wording is clearly designed to get the consumer to think they’re being offered a 30 year fixed rate but what actually is being offered is an ARM with a fixed-rate period (since all Conforming ARMs are based on 30 years). Avoid these companies when looking for quotes.

Requirements For Conforming Loan:

A lot goes into getting qualified for a Conforming Loan and the actual guide issued by Fannie Mae is 1250 pages. We won’t go into everything; just the most important areas you should be aware of as of January 1, 2021:

  • The minimum down payment for a purchase is 3% down or the minimum amount of equity in a home for a refinance is 3%.
  • Generally speaking, you need above a 620 credit score to obtain a Conforming loan. And getting qualified for scores below 700 gets more difficult as you move further down.
  • The debt-to-income ratio should be 50% or lower.
  • Most Conforming loans do not need liquid asset reserves however some do. If you are purchasing a rental property (or refinancing a rental property) you’ll need to show some liquid reserves. If you have a low credit score, a debt-to-income ratio above 45%, and are taking cash out you’ll need to show some liquid reserves.

Is A Conforming Loan A Conventional Loan?

As mentioned above; a Conforming loan is a Conventional loan however not all Conventional loans are Conforming loans.

Conforming Loans To Purchase A Home:

The Conforming loan program offers some great opportunities for those looking to purchase a home. From First Time Home Buyers to seasoned investors; conforming loans have low-interest rates at great terms.

You can put down as little as 3% and the loan process for a Conforming loan is very efficient as it allows for 2-3 weeks closing periods if the buyer and seller are in a rush to close quickly. Another great aspect of the Conforming loan program is that you might get an appraisal waiver which helps save on costs and if granted really speeds up the process.

Conforming Loans To Refinance A Current Mortgage:

When it comes to refinancing a mortgage in California; the Conforming loan program is perhaps the most popular. Like purchases, you can get an appraisal waiver and you can close fairly quickly due to every loan being underwritten by the AUS of Fannie Mae or Freddie Mac.

If you really want things to move quickly be sure to have your income documentation, mortgage statement, and homeowners insurance information ready to go before applying. Conforming loan limits in California has increased over the last twenty years and that is expected to continue.

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Differences Between Conforming and FHA Loans

We’ve touched on the main difference between the two programs (one conforms to Fannie Mae/Freddie Mac standards and the other is backed by the U.S. government) and here we’ll touch on the differences between the two loan programs at the consumer level:

  • Conforming loans are best for those with credit scores above 700
  • Conforming loans can be used to purchase or refinance investment properties
  • If you put down 20% or have 20% equity in your home then you will not have Mortgage Insurance with a Conforming loan
  • FHA loans are great for people with credit scores below 700
  • FHA loans help those with small down payments/little equity that might not get qualified under a Conforming loan program
  • With FHA loans you do not need liquid assets
  • FHA loans can only be used on primary homes; you can not purchase a rental property with a FHA loan.

And just like Conforming loan limits in California; FHA has it’s own loan limits.

Is A Conforming Loan Right For You?

If you have a credit score above 700 and a debt-to-income ratio below 50% than a Conforming loan might be right for you even if you only have 3% down or 3% equity (if you’re refinancing).

Conforming loans offer some of the best mortgage rates and for those that have less than 20% down (or equity) you’ll have a lower Mortgage Insurance (MI) cost.

In addition to the lower MI cost, you’ll be able to get rid of the MI whereas on an FHA loan it’s permanent.

Conforming Mortgage Rates

We offer a wide variety of Conforming mortgage rates.

From 30-year fixed-rates all the way down to 10-year fixed-rates; we cover a wide spectrum of loan programs to ensure we’re able to match our client’s needs.

Loan Officer Kevin O’Connor has the experience, knowledge, and customer service skills homeowners want. He will take the time to answer your questions and offer solutions to help improve your financial position.

Current Conforming Mortgage Rates

JB Mortgage Capital, Inc.

We offer the best of both worlds when it comes to mortgage rates and the service we provide. Working with JBMC, Inc. you’ll have access to internet low mortgage rates and one-on-one personal service.

From application to closing you’ll work with one Loan Officer which enables a much more efficient loan process. We’ve deployed a system that uses the latest technology to ensure our mortgage rates are among the most competitive in the industry.

We have an “A+” rating with the Better Business Bureau, a “AAA” rating with the Business Consumers Alliance and a “Five Star Rating” with Zillow. Give us a call today to get a no-cost/no-obligation quote: 1-800-550-5538 or submit an online request for more information.

Loan Officer Kevin O'Connor

About The Author

Loan Officer Kevin O'Connor has over 16 years of experience as a Mortgage Loan Originator and is licensed with the state of California and the Nationwide Mortgage Licensing System. He has a top rating with the Better Business Bureau, Google, Yelp, and Zillow. CA DRE #01499872 / NMLS #247447

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