2021 Conforming Loan Limits Just Went Up in Hampton Roads and What that Means for You

Hello Hampton Roads,

To understand what conforming loan limits are and why they are important we need to talk about the two Government Sponsored Enterprises (GSE’s), Fannie Mae and Freddie Mac. Both Fannie and Freddie provide liquidity to lenders by buying back mortgages up to a certain amount based on the type of property; these amounts are known as conforming loan limits. Fannie and Freddie have strict rules about the type of loans they buy back—not only do the loans have to fall within a certain dollar and property type, the borrowers must also be vetted as credit worthy.

Once they buy back these mortgages, Fannie and Freddie either keep them in their own portfolios or they bundle them into mortgage backed securities (MBS) and sell them to investors guaranteeing both the principal and interest. Because the US government guarantees the return of principal with interest, this makes these securities very attractive to investors who are willing to accept a guaranteed payment over a bond that may offer higher interest but could lose the principal.

Conforming loan limits go up yearly and the table below shows the conforming limits in Hampton Roads for 2021 and in 2020. Each time housing prices rise, mortgage loan limits increase.


Single Unit

2 Unit

3 Units

4 Units











Since Fannie and Freddie guarantee these loans, lenders are willing to make more of these types of loans to borrowers because their risk is lower and they can charge lower interest rates and fees to borrowers. On the other hand, non-conforming loans, which are loans above these amounts, are expectedly more expensive because of greater risk for the lender. These loans are called “jumbo loans” and are less attractive to lenders because they are harder to sell (Fannie and Freddie won’t buy them). In order to sell these homes on the secondary market, investors will want a higher interest rate because the principal is not guaranteed and these higher rates are passed on to the borrowers in the form of higher mortgage rates.

If you are interested in buying a home above the conforming loan limit, you can make a larger down payment or use two loans (80/20 loan) to buy the property; the 1st loan is a conforming loan and the 2nd is an equity line. Talk to your lender to see what options are open for you and I’m always happy to talk about your real estate plans as well:  https://calendly.com/liz-schuyler

Thanks for Reading,


See all homes for sale here:  https://www.hamptonroadsrealestate.us/


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