Home prices have risen so much during the past year that, in 2023, loan limits for all but two U.S. counties will be higher — and it will be possible to get a federally backed mortgage of more than $1 million in some areas.
In the highest-cost areas of the country — which include, among other places, the San Francisco, Los Angeles, Washington, D.C., and New York City metros plus all of Alaska and Hawaii — the federal loan limit will be set to $1,089,300, the Federal Housing Finance Agency says.
For the rest of the country, it will be somewhere between $726,200 and that number, depending on the median home values in each county.
Million-dollar mortgages traditionally required a “jumbo loan,” which is not federally backed and has stricter lending requirements. Those typically include a down payment of 20%, if not more, and an excellent credit score.
This change means that borrowers in the areas of the country with the highest housing costs may be able to secure a $1 million mortgage with a down payment as small as 3%.
If you’re ready to work toward buying a home, check out “9 Tips for Getting the Best Deal on a Mortgage.”