Loan Limit Increase for Conventional Loans

Fannie Mae, Freddie Mac Loan Limit Increases to more than $510,000

In a recent news release, the Federal Housing Finance Agency announced an increase in the maximum conforming loan limit by nearly $100,000 since 2016!

Starting January 1, 2020, the conventional loan limits for Fannie Mae and Freddie Mac will be more than $510,000, an increase from $484,350 in 2019. This new update applies to one-unit properties only.

For the areas where the cost of living is higher, there will be an increase beyond this baseline limit depending on the county. Over the last year, the median home values have increased generally, and particularly in the high-cost areas. Maximum loan limits will increase in many counties. For the high-cost areas, the new ceiling loan limit for a one-unit property will rise to $765,600 or 150% of $510,400.

For areas like Alaska, Hawaii, Guam and the US Virgin Islands where a special statutory provision exists, the baseline loan limit will be $765,600 for a one-unit property.

The recent announcement by FHFA marks the fourth straight year the conforming loan limits increased. This is after an entire decade from 2006 to 2016 without announcing any increment. Back in the year 2017, the conforming loan limit was set at $424,100, and increased to $453,100 in 2018, before the 2019 limit was set at $484,350 and now the loan limits will top $510,000 in 2020.

What does this mean for the mortgage borrowers?

First, the FHFA appreciates the rising home prices in all the counties in the US. With the increment in the conforming loan limits, (for the loans that are insured by Fannie Mae and Freddie Mac), more homebuyers will have access to safe and more affordable mortgages. This is according to the California Association of Realtors, who stated the latest news release by FHFA. This conforming loan limits increase allows the cost of mortgages will remain manageable for borrowers who qualify. Further, it is expected that housing affordability will improve across the counties in the US, including the High-cost Areas.

The National Association of Realtors® in conjunction with regional Realtors® have been advocating for higher conforming loan limits. The recent increment is an indication that the country is headed in the right direction, trying to tackle the rising cost of housing. Therefore, the cities that have been experiencing high median home prices will benefit from the new increment.

Consider that the conforming loan limit is a major determinant of the maximum mortgage size that the Government-Sponsored Enterprises (Fannie Mae and Freddie Mac) can guarantee. This is unlike the none-Conforming and Jumbo Loans that come with strict and tighter underwriting standards.

Sometimes the non-conforming loans carry higher mortgage interest compared to Fannie Mae and Freddie Mac loans. This increases the monthly mortgage repayments making it more difficult for families to afford the mortgage.

How Does the Conforming Loan Limit work?

The conforming loan limit is set as per the permanent formula established under the Housing and Economic Recovery ACT of 2008. The conforming loan limit is also designated by the county, with a majority of the counties assigned baseline conforming loan limit.

Note that there can be variations on the conforming loan limit, as per the regional economic differences. This applies in the case of areas where the 115% of the local median home value exceeds the baseline conforming loan limit.

For those areas, the maximum loan limit is set higher. This is following the Housing and Economic Recovery Act that sets the maximum loan limit for those areas.

Moreover, some special statutory provisions within HERA, establish a different loan limit calculation for four counties, namely Alaska, Hawaii, Guam, and the US Virgin Islands. This is the reason why in 2020 as well as previous years, the conforming loan limits for these areas tend to be notably higher compared to the other areas. This is because; HERA designates these areas as High-Cost Areas.

The Baseline National Conforming Loan Limit

According to the Housing and Economic Recovery ACT of 2008, the Baseline Loan Limit should be adjusted annually. This is under the National Average Home Price. Therefore, HERA specifies that FHFA should establish and maintain a formula for tracking the National Average Home Price.

Therefore, in determining the 2020 maximum conforming loan limit, the FHFA used the seasonally expanded-Data HPI. As per the index used by FHFA, the increase was calculated as 5.378 percent.

8 Reasons Why You Should Choose a Conventional Home Mortgage (#2 is our FAVORITE)

Whether you’re looking to build a new home or refinance your existing one, you’re going to come across lots of different loan types in the process. The one I’d like to recommend is a conventional loan. You can even get a Conventional Loan right here in St. George, at Sun American Mortgage!

You’re probably wondering how getting a Conventional loan will benefit you, right? Well In this post, we feature many of the benefits a conventional can give you, as well as how you can get one!

What is a conventional loan?

A conventional loan refers to a loan type that is not backed by government agencies. The conventional home mortgage conforms to standards set by Fannie Mae and Freddie Mac, the largest buyers of mortgage loans here in the US. 

Conventional loans fall under two subcategories. These are conforming and non-conforming loans. Conforming loans follow the guidelines that are set by Fannie Mae and Freddie Mac. There are several kinds of non-conforming loans, the most common being jumbo loans, (because they are borrowing a loan amount higher than the limit set for that area) are for those that don’t qualify for a Conforming Loan.

Some examples of home loans backed by government agencies include an FHA (Federal Housing Administration) and the VA (Veteran home loan). A conventional loan can be a great low-cost option for first time home buyers who are looking for better alternatives. 

1. Enjoy as low as 3% down payment

A conventional loan is available at 3% down as opposed to the industry standard of 20%. Like I mentioned above, this is a huge reason why going with a conventional loan is a great option for first time home buyers. Some people can’t wait till they have that 20% saved up, so if you need to get into a home sooner than later, a conventional is your friend.

2. Avoid paying monthly mortgage insurance

One of my favorite features of conventional loans is that you don’t have to pay any monthly Mortgage Insurance. I do want to urge a caution of warning though, there is a slight catch. This benefit only applies if you put the standard 20% down. If your down payment is less than 20%, you’re still going to have to pay for monthly insurance. I’d still recommend getting a conventional loan, because let’s say you only put down 3% and get into your dream house. You’ll have to pay the monthly mortgage insurance until your loan to value ratio reaches 80%. If you are refinancing your already existing Mortgage, you can choose to go conventional and save some money. This means that if you have an FHA or VA loan, you can transition to conventional when you refinance & eliminate that pesky mortgage insurance.

3. The convenience and flexibility to be applied if building different property types

For most government-sponsored loans, they’re going to limit you to building only for a primary residence. If you’re interested in building a whole complex, investment property, or vacation home, The Conventional loan is  going to allow you to do that.  Government loans have different restrictions for those property types. Going Conventional gives you more freedom! Of course, you can still build a primary residence with a Conventional Loan, but for someone with an investment mindset and would like to earn some rental income from the property, a Conventional Loan is a solid option & worth pursuing.

4. Conventional loan borrowers can choose adjustable-rate or fixed-rate loans

Depending on the plans for the property, you can either be qualify for an adjustable rate, or fixed-rate loan. Many prefer to go for the fixed-rate option for the security of knowing your interest rate will be fixed for the life of the loan. The adjustable-rate option allows the you to enjoy a lower rate on a conventional loan for a time, but your payment may increase/decrease over the life of the loan.

5. We Close on-time

Here at Sun American Mortgage, we always close on time! So long as you’re meeting the requirements & there’s no hiccups that are out of our control, Conventional loans are processed faster compared to government-backed mortgages. 

Cons associated with applying for a conventional loan:

6. The terms and conditions are stricter compared to the FHA and VA home loan options.

Since they aren’t a government backed loan type, there are stricter guidelines to qualify. Fannie Mae & Freddie Mac decide how and when they like to lend their money and they choose to have guidelines that protect their investments. It makes sense why they need to be more careful, but it’s just something to keep in mind during the qualifying process! Just because this is the case, don’t let it scare you away though! Our team here at Sun American Mortgage will always explore all of your options to get you into your dream home. We’re all about helping families over here, & that’s a guarantee!

7. The decision on conventional loan qualification is entirely made by the lender.

I promise it’s not as scary as you think! It just means if you’ve had a recent foreclosure in the past, it may limit what your options are when qualifying for a home loan. But isn’t that the case with every loan? Our team is going to do everything in their power to get you in your dream home though & there’s a lot of options that can help in those situations.

8. If the borrower cannot afford the 20% down payment, they have to cope with the requirement to pay the mortgage insurance.

Like I mentioned in paragraph 2, this is my favorite thing about Conventional loans. Yes, you’ll need to have saved the industry standard of 20% to enjoy not paying Mortgage Insurance. But!! If you don’t have 20% to put down, you can still get a conventional loan & later refinance to get rid of that Mortgage Insurance.

Come talk to Sun American Mortgage in St. George (home loan) today for any of your Mortgage needs! We love helping families getting into the homes of their dreams! After all, were all about Changing Lives One Home at a Time.

Low Down Payment Options: What We Learned After Analyzing TONS of Mortgage Loans!

USDA Home Loan in Utah

Saving enough money to afford a high down payment for a home purchase can take a long time. Luckily there is an option of mortgage loans with a low down payment, to no down payment. The typical required 20% down payment is outdated. New homebuyers have been taking the low down payment loans and the experience has been not just enjoyable, but a huge financial relief.

In this post, we share what we learned after analyzing the home loan options available at Sun American mortgage.

1. FHA Programs

FHA home loans are designed to favor the low to moderate-income earners, which allows new homebuyers to take advantage of the lenient credit score requirements. An FHA loan only requires a 3.5% down payment & has more flexible qualification guidelines.
If you can’t qualify for the traditional mortgage loan types, FHA is a good alternative, thanks to the FHA guarantee. At Sun American Mortgage, you can get approved for an FHA loan if you have a decent credit score with at least 600s and can afford a low down payment of 3%. Compare to a more traditional mortgage guideline, where the loan applicant is expected to reach a credit score of 700-plus and a high down payment of as much as 20%. So, if you are in search of the best low-down payment, FHA home loans have got you covered!

2. Rural USDA Home Loan

This type of loan is available to those looking to purchase a home in the rural or suburban areas. This loan is typically offered a little outside of the St. George area to be considered rural. It’s available at no down payment, hence a low investment mortgage. Backed by the U.S. Department of Agriculture, the loan is designed for aspiring homeowners who are looking to buy outside of a large urban area. It allows you to renovate, build, improve or relocate your primary residence, within the eligible rural areas. This type of loan is available for 30-year fixed rates only. We also give you flexible qualification guidelines, giving you access to 103.5% of the appraisal value. A USDA mortgage requires an upfront guarantee premium and low rate monthly mortgage Insurance. If you are wondering whether you can qualify for a USDA rural home loan, come talk to one of our friendly loan officers will help you through the loan application process.

3. Utah Housing Loan

The Utah housing loan gives loan applicants access to a zero-down payment, offering flexibility to qualified first-time homebuyers. If you are a first-time home buyer in Utah and you meet the income and other eligibility requirements, you can get approved for the Utah Housing loan. This option provides a 30-year mortgage at a competitive interest rate and is available at Sun American Mortgage! However, the loan applicant is expected to live in the home and cannot purchase it as a rental property. Also, the borrower’s credit score should reflect an ability to pay bills on time, with a score of at least 620.

4. Veterans Home loan

The Veterans Administration home mortgage allows qualified members to access affordable home financing. This loan gives home buyers access to a zero-down payment as well, offering flexibility to qualified first-time homebuyers, so long as the home buyer is a veteran or the spouse of a U.S Vet. If you are a veteran and first-time home buyer in Utah and you meet the income and other eligibility requirements, you can get approved for this loan. This option allows a 30 year mortgage at a competitive interest rate and is also available at Sun American Mortgage! Again, the home buyer is expected to live in the home & cannot purchase it as a rental. Credit scores need to be at least 620 to be eligible for this loan as well.

If you are curious whether you can qualify for any of the home loan types mentioned above, then feel free to come talk to one of our friendly loan officers today! We would be happy to answer any questions you may have & will help you through the loan application process in a breeze.


If you are looking for a home mortgage with a low down payment, an FHA loan is a great option. The FHA has been helping buyers who don’t have the traditional 20% down payment saved, qualify for a mortgage. FHA borrowers pay mortgage insurance premiums until the loan is fully repaid. This is the compromise a borrower makes to get into a home without having to put a lot of money down. The mortgage insurance is the FHA’s premium to finance the home. The FHA mortgage insurance will last for the life of the loan. This is probably the biggest downside of the FHA loan. An FHA home mortgage is a loan insured by the Federal Housing Administration and the premium payments allow the loan to be guaranteed by the FHA-approved lender. This means that if a borrower fails to pay their mortgage and defaults on the home, the St. George mortgage lenders will be compensated by the FHA. 

The FHA loan comes with various advantages. In this post, we guide you through the important aspects of this type of home loan before applying for an FHA loan.


You can qualify for an FHA loan with a lower credit score compared to the score requirements for a conventional home loan. For borrowers who are still struggling to save for that huge down payment that a conventional loan requires, an FHA loan is a better option. This is considering that the credit score also takes into consideration the saving habits of the individual. Borrowers can qualify for a loan even with a credit score of 580. This is opposed to the conventional loans where the credit score requirement is 620 or higher.

The FHA loan qualification schedule is more forgiving of borrowers with past bankruptcies, foreclosure or short sales. There is a shorter waiting period after these credit delinquencies to qualify for an FHA loan.

Down payment requirements for an FHA loan is lower compared to conventional loans. A borrower can qualify for an FHA mortgage with as little as 3.5% down. In some cases, borrowers with lower credit scores, you may need a larger down payment (typically around 10%) to qualify. 


The mortgage interest rates on FHA loans are typically lower as borrowers with a credit score of 660 can qualify for similar interest rates as conventional borrowers with a score of 740. An FHA loan is considered a better option for those borrowers. Another reason why FHA loan rates could is lower is that Fannie Mae and Freddie Mac added loan-level price adjustments and guarantee fees to their loans that are passed onto the borrowers. 


If you are planning move forward with a Utah FHA refinancing option in the future, you will enjoy more benefits. This is because FHA loans provide a streamlined refinancing program, that minimizes the paperwork and the hassle associated with refinancing a conventional loan. St. George mortgage lenders can qualify an FHA refinancing request before ordering a property appraisal. In the end, this saves you money especially if the mortgage rates drop at the time of applying for the Utah FHA refinance. Borrowers under the FHA loan program have experienced an easier refinancing process with less hassle compared to a conventional loan refinance.


Down payment gifting is when your family member or an approved donor gifts you money to help cover part of your down payment. With an FHA home mortgage, you can have your entire down payment gifted to you! With conventional loans, down payment gifting is only acceptable to some of the time. This is a major advantage for borrowers opting for an FHA home loan but don’t have the entire down payment saved away. This option must be declared by obtaining a letter from the donor.


FHA loans can be assumed by a homebuyer, which means that if you are selling the house down the road, it’s possible that the person who buys it can take over the FHA loan. However, the requirements for the loan have to be met by the person purchasing the property. The benefit and features of the loan are also passed to the next homebuyer because if the seller is enjoying a low interest on the mortgage, the lower interest rate is paid. The buyer will have an advantage when reselling the property. All conventional mortgages are not assumable.


FHA loans have fewer requirements compared to a conventional loan. In terms of credit score, debt ratio, and down payments, an FHA is a more flexible option. If you are looking for a simpler route when it comes to financing a loan, you should take a look at an FHA mortgage, which has easier qualification requirements.

In closing, many finance sector experts expect that the future of the FHA mortgage loans is bright. You can expect that FHA loans will become more affordable over time. 

Warning! Don’t Get a Reverse Mortgage Until You Read This!

If you live in the United States, you are aware of the rising cost of medical care, living expenses and increasing limitations on social security. Unfortunately, many people reach their retirement age without enough money to fund their retirement years.

Back in the days, if you borrowed money using your home, you had to pay monthly loan payments. Today, homeowners can opt for a Reverse Mortgage, where you can convert your home’s equity into a tax-free income.

So, what is a Reverse Mortgage, & how do they work?

To give a little history, the Reverse mortgage was launched by the US Department of Housing and Urban Development, in the year 1990.

A reverse mortgage refers to a type of loan available to qualified homeowners 62 years old & up, who are willing to convert their home’s equity into cash. This is a great financial solution for retirees. This type of financing is usually tax-free as well.

The homeowner retains full entitlement of the property against which the loan amount is borrowed. The Homeowner is still responsible for clearing property taxes, and other utility bills, as well as the property maintenance costs.

If an applicant meets the minimum requirements for the reverse mortgage, there are three different disbursement options, which are: receiving a lump sum, opting for the line of credit, or monthly repayment plans.

The total loan amount is due when the borrower of the reverse mortgage has passed away, or stopped living in the home for 12 or more months, or has opted to sell the property. If any of those circumstances end up happening, the homeowner is expected to pay back the loan. There are some alternative solutions if you wish to get rid of your Reverse Mortgage at any point. One can sell the property or refinance through different Utah housing loan types.

The advantage of taking the Reverse mortgage financing is that, so long as the homeowner continually meets the requirements, no monthly repayments will have to be made.

So, how much can a loan applicant qualify for?
The homeowner’s age determines the amount they can borrow. The amount of home equity they have available and your current interest rate can affect this as well. Note that you are not allowed to use more than 80% of the total home equity.

How do I qualify for a reverse mortgage?

  • Must be at least 62 years old.
  • Proof of outright homeownership, with a low remaining Utah housing loan, that can be paid off at the closing of the Reverse Mortgage. 
  • Show that the property is your primary residence.
  • Attend a complete financial counseling session, by a qualified HUD-approved professional. Illustrate that you can meet the other financial obligations. 

The HECM home requirements 

  • The home you are borrowing money against is either a single-family home or a two-to-four-unit home.
  • The loan applicant is the property owner. 
  • It is a HUD-approved home or condominium and meets the FHA requirements. 

Let’s say you got a Reverse Mortgage & have borrowed money against your own property. Since a Reverse provides you with a tax-free income, there is no restriction on how to spend the cash. Retirees can choose to offset existing loans, or even fund their vacation using the borrowed money. In other words, the lender has no control over where you use the money. There are so many more reasons why a Reverse Mortgage is a great decision! 

Get Your Reverse Mortgage Questions Answered by Contacting Our Expert Below!

Nan Glauser | Loan Officer | 435.229.6914 | NMLS# 1119710