2015 continued the recent streak of appreciation in San Diego County. Home prices rose significantly enough that the Federal Housing Finance Agency (FHFA) decided to increase the county’s conforming loan limit for 2016 after their yearly review. Homes in San Diego County are deemed “high cost” and San Diego was one of only 39 counties in the U.S. where conforming loan limits will increase in 2016. The 2015 conforming loan limit for San Diego County was $562,350 which was also an increase from 2014.
San Diego Conforming Loan Limits for 2016
The new 2016 San Diego County conforming loan limit will be $580,750. That marks an increase of $18,400 over the current limit. The $580,750 is designated for single family homes. The loan limits are higher for 2-4 unit properties as can be seen below.
What Is A Conforming Loan Limit?
Conforming loan limits are set by the government entity FHFA. These limits are the maximum allowable loan size for a mortgage to be purchased by Fannie Mae and Freddie Mac. They vary by county and are based on median home prices within the local area.
The conforming loan limits pertain to the whole county. That means all cities within San Diego County, including (but not limited to) Poway, Carlsbad, Escondido, El Cajon, San Marcos, and La Mesa fall under these limits.
In addition to San Diego, three other counties in California will receive increases to their conforming loan limits for 2016. They are Napa, Monterey, and Sonoma.
Beneficial Changes to the Maximum Loan to Value = Lower Down Payments
In conjunction to the higher loan limits that San Diego County will benefit from in 2016, it was also announced that a borrower can now borrow up to a 95% loan to value (LTV) up to the $580,750 loan limit. Previously, clients could only borrow up to 90% when the loan was above $417,000. This means that a borrower can now go to a higher loan amount and put only 5% down in 2016.
For example, a homebuyer could purchase a home with a price of $645,277 and use a loan of $580,750 and only put down $64,527 in San Diego County. With interest rates still near all time lows, 2016 could be a great year to buy or refinance.
Any loan above $580,750 in San Diego County will require the use of a Jumbo Loan. Jumbo loans are not government backed by entities such as Fannie Mae or Freddie Mac.
The qualification process for jumbo loans can be more difficult due to lower Debt to Income ratios, lower LTV’s, and higher reserve requirements. With that said, there are many options available to borrower’s needing a jumbo loan. Please read my Ultimate Guide to Jumbo Loans Resource to learn more about the options available including lower down payment and higher debt to income ratio options.
How Can I Find Out What type of Loan I Need?
The best thing you can do is to speak with a knowledgeable broker about your personal situation. There are a variety of factors to take into account and we can help you consider your options.
As an experienced San Diego Mortgage Broker, I offer all the above loan options; traditional conforming, high balance conforming, and true jumbo loans. Rates are still exceptionally low and there are many options available.
Please call me at 619-312-0612 with any questions you have as we can get your mortgage application process started today.