A new rule for $1 million mortgages could help Bay Area homebuyers

For the first time ever, the federal government will back mortgages in the Bay Area over $1 million — an incremental but important change that, combined with stable or falling
mortgage rates
and
home prices, could finally help some buyers land a home in 2023.

The federal agency that regulates Fannie and Freddie
announced last week
that the two government entities can buy and back mortgages on single-family homes and condos up to $1,089,300 next year in
all Bay Area counties
except Napa (where the limit will be $1,017,750), Sonoma ($861,350) and Solano ($726,200).

Some lenders have already implemented the new limits.

The increase “is definitely a positive for the Bay Area,” said Guy Cecala, publisher of Inside Mortgage Finance. “But most people would say it’s not enough,” to keep up with the
surge in home prices
we’ve seen in recent years.

The region’s high home prices are likely one reason why Fannie and Freddie generally back a smaller portion of loans in the Bay Area than they do nationwide.

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