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2023 Conforming Loan Limits In California

The 2023 Conforming loan limit in California is $726,200 and up to $1,089,300 in “high cost” counties like Orange County, Los Angeles County, Santa Clara County, and, San Mateo County.

On November 30, 2022, The Federal Housing Finance Agency (FHFA) announced they are raising the 2023 Conforming loan limits in California (effective immediately) which is good news for homeowners and homebuyers. A conforming loan is a mortgage that “conforms” to underwriting guidelines set by Fannie Mae and Freddie Mac.

This allows some mortgage loans that were previously labeled “Jumbo” to now be placed in the Conforming loan limit category. Conforming loans in California generally come with better mortgage rates and easier underwriting requirements.

2023 California Conforming Loan Limits

Here are the 2023 Conforming limits in California for all 58 counties. The Federal Housing Finance Agency (FHFA) updates its conforming loan limits every year. For comparison purposes, we are listing the 2023 California FHA loan limits as well.

California Conforming Loan Limits Increase In 2023:

The 2023 California Conforming loan limit increase is one of the largest on record. On November 29, 2022, the Federal Housing Finance Agency released the following press release:

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022.
National Baseline
The Housing and Economic Recovery Act (HERA) requires that the baseline CLL for the Enterprises be adjusted each year to reflect the change in the average U.S. home price. Earlier today, FHFA published its third quarter 2022 FHFA House Price Index® (FHFA HPI®) report, which includes statistics for the increase in the average U.S. home value over the last four quarters. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 12.21 percent, on average, between the third quarters of 2021 and 2022. Therefore, the baseline CLL in 2023 will increase by the same percentage.
High-Cost Area Limits
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2022, which increased their CLL. The new ceiling loan limit for one-unit properties will be $1,089,300, which is 150 percent of $726,200.
Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $1,089,300 for one-unit properties.
Due to rising home values, the CLLs will be higher in all but two U.S. counties or county equivalents.
Source: FHFA

Since 2008 the FHFA has used the HERA formula to calculate Conforming loan limits.

Previous Years Conforming Loan Limits

Home values have increased over the last decade and raising the Conforming loan limits allows more people to qualify for the best available mortgage rates. The Federal Housing Finance Agency (FHFA) updates its conforming loan limits every year.

Here are the previous loan limits for the years 2017 to 2022.

2022 California Conforming Loan Limits

The California Conforming loan limit in 2022 was $647,200 for most counties and in some high-cost counties, it’s as high as $970,800.

2021 California Conforming Loan Limits

The California Conforming loan Limit in 2021 was $548,250 and in some high-cost counties, like Los Angeles, Orange, San Mateo, and Alameda) it was as high as $822,375.

2020 California Conforming Loan Limits

The California Conforming loan Limit in 2020 was $510,400 and in some high-cost counties, like Los Angeles, Orange, San Mateo, and Alameda) it was as high as $765,600.

2019 California Conforming Loan Limits

The California Conforming Loan limit in 2019 was $483,350 and in some high-cost counties, like Los Angeles, Orange, and Alameda) it was as high as $726,525.

2018 California Conforming Loan Limits

The California Conforming Loan limit in 2018 was $453,100 and in some high-cost counties, like Los Angeles, Orange, and Santa Clara) it was as high as $679,650.

2017 California Conforming Loan Limits

The California Conforming Loan limit in 2017 was $424,100 and in some high-cost counties, like Los Angeles, and San Francisco) it was as high as $636,150.

Conforming Loan Programs

Conforming loan programs are the most popular loan programs out there. Below we cover everything you need to know about Conforming loans, what types of Conforming loans are available, getting qualified, and Conforming loans for people with less-than-perfect credit. Conforming loans usually have low mortgage rates at great terms.

At JB Mortgage Capital, Inc. we encourage people to ask questions and if you have any questions about Conforming loans please be sure to let us know.

What Is A Conforming Loan?

A Conforming loan is a mortgage loan that “conforms” to the underwriting standards of Fannie Mae or Freddie Mac. All Conforming loans go through an Automated Underwriting System (AUS) prior to an actual underwriter reviewing the file.

Conforming loan limits in California are the maximum loan amount a lender can lend under current Conforming guidelines.

A Conforming loan is a Conventional Loan and a Conventional loan is any mortgage loan that is not backed by the U.S. Government. FHA home loans and VA home loans are backed by the U.S. government and are not Conforming nor are they Conventional loans.

What Types Of Conforming Loans Are There?

The most popular Conforming loans are the 30-year Fixed-Rate Mortgage (FRM) loans and the 15-year fixed-rate loan. Most homeowners or homebuyers go with either a 30-year or 15-year fixed-rate program however there are many other options. Here is a full list of all the fixed-rate mortgage options with Conforming loan limits.

30-year fixed-rate
25-year fixed-rate
20-year fixed-rate
15-year fixed-rate
10-year fixed-rate

There are no fixed rate options below a 10-year fixed rate. As for the Adjustable Rate Mortgages (ARM) under the Conforming loan program:

5/1 Adjustable Rate Mortgage
7/1 Adjustable Rate Mortgage
10/1 Adjustable Rate Mortgage

All of the loan programs fit under the Conforming loan limits in California. The 10/1 ARM is the longest fixed-rate period under the Conforming loan ARM program. All Adjustable Rate Mortgages are based on a 30-year time period.

The first number (for example 5/1) is the number of years the interest rate is fixed and the second number represents how often the rate adjusts after the fixed-rate period. The fixed-rate period is always at the beginning. So a 5/1 ARM:

For the first five years, the interest rate is fixed and it does not change
For the first five years, your payment does not change
After the first five years, your rate adjusts once a year each and every year until year 30.
Your monthly payment adjusts once a year after the fixed-rate period.

Mortgage Pro-Tip About Mortgage Ads:

One of the most popular things in mortgage advertising is unscrupulous mortgage companies trying to make it seem like their advertised rate is a 30-year fixed-rate. It happens a lot and I wish it would stop because the average consumer can be easily tricked.

If you are working with a mortgage company that does this we suggest you find a new mortgage company. If they can’t be straightforward with what there advertising how can you expect them to be straightforward with providing you a low-rate mortgage?

Some of the wording you’ll see in these deceptive ads are:

“Low rate on a 30-year loan”
“Low fixed rate on a 30-year loan”
“Lock in a fixed rate on a 30-year loan”

All of the above may seem like a 30-year fixed-rate loan to someone who is not in the mortgage industry or someone with limited to no experience buying a home however to an experienced professional the wording is clearly designed to get the consumer to think they’re being offered a 30 year fixed rate but what actually is being offered is an ARM with a fixed-rate period (since all Conforming ARMs are based on 30 years). Avoid these companies when looking for quotes.

Requirements For Conforming Loan:

A lot goes into getting qualified for a Conforming Loan and the actual guide issued by Fannie Mae is 1250 pages. We won’t go into everything; just the most important areas you should be aware of as of January 1, 2022:

The minimum down payment for a purchase is 3% down and the minimum amount of equity in a home for a refinance is 3%.
Generally speaking, you need above a 620 credit score to obtain a Conforming loan. And getting qualified for scores below 700 gets more difficult as you move further down.
The debt-to-income ratio should be 50% or lower.
Most Conforming loans do not need liquid asset reserves however some do. If you are purchasing a rental property (or refinancing a rental property) you’ll need to show some liquid reserves. If you have a low credit score, a debt-to-income ratio above 45%, and are taking cash out you’ll need to show some liquid reserves.

Is A Conforming Loan A Conventional Loan?

As mentioned above; a Conforming loan is a Conventional loan however not all Conventional loans are Conforming loans.

Conforming Loans To Purchase A Home:

The Conforming loan program offers some great opportunities for those looking to purchase a home. From First Time Home Buyers to seasoned investors; conforming loans have low-interest rates at great terms.

You can put down as little as 3% and the loan process for a Conforming loan is very efficient as it allows for 2-3 weeks closing periods if the buyer and seller are in a rush to close quickly. Another great aspect of the Conforming loan program is that you might get an appraisal waiver which helps save on costs and if granted really speeds up the process.

Conforming Loans To Refinance A Current Mortgage:

When it comes to refinancing a mortgage in California; the Conforming loan program is perhaps the most popular. Like purchases, you can get an appraisal waiver and you can close fairly quickly due to every loan being underwritten by the AUS of Fannie Mae or Freddie Mac.

If you really want things to move quickly be sure to have your income documentation, mortgage statement, and homeowners insurance information ready to go before applying. Conforming loan limits in California have increased over the last twenty years and that is expected to continue.

Differences Between Conforming and FHA Loans

We’ve touched on the main difference between the two programs (one conforms to Fannie Mae/Freddie Mac standards and the other is backed by the U.S. government) and here we’ll touch on the differences between the two loan programs at the consumer level:

Conforming loans are best for those with credit scores above 700
Conforming loans can be used to purchase or refinance investment properties
If you put down 20% or have 20% equity in your home then you will not have Mortgage Insurance with a Conforming loan
FHA loans are great for people with credit scores below 700
FHA loans help those with small down payments/little equity that might not get qualified under a Conforming loan program
With FHA loans you do not need liquid assets
FHA loans can only be used on primary homes; you can not purchase a rental property with an FHA loan.

And just like Conforming loan limits in California; FHA has its own loan limits.

Are You Looking For A VA Home Loan?

If you are a veteran you might be eligible for a VA home loan. We offer a great California VA Home Loan program to veterans throughout California. The VA home loan program can be used for the following transactions

Purchase
Refinance
Renovation

Not many people know this but if you have renovations you would like to complete the VA home loan program has an option that might work for your situation. You can borrow up to an additional $50,000 and qualifications are similar to that of a regular purchase or refinance VA Home Loan.

Is A Conforming Loan Right For You?

If you have a credit score above 700 and a debt-to-income ratio below 50% then a Conforming loan might be right for you even if you only have 3% down or 3% equity (if you’re refinancing).

Conforming loans offer some of the best mortgage rates and for those that have less than 20% down (or equity), you’ll have a lower Mortgage Insurance (MI) cost.

In addition to the lower MI cost, you’ll be able to get rid of the MI whereas on an FHA loan it’s permanent.

Conforming Mortgage Rates

We offer a wide variety of Conforming mortgage rates.

From 30-year fixed rates all the way down to 10-year fixed rates; we cover a wide spectrum of loan programs to ensure we’re able to match our client’s needs.

Loan Officer Kevin O’Connor has the experience, knowledge, and customer service skills homeowners want. He will take the time to answer your questions and offer solutions to help improve your financial position.

Current Conforming Mortgage Rates

JB Mortgage Capital, Inc.

We offer the best of both worlds when it comes to mortgage rates and the service we provide. Working with JBMC, Inc. you’ll have access to the internet low mortgage rates, and one-on-one personal service.

From application to closing you’ll work with one Loan Officer which enables a much more efficient loan process. We’ve deployed a system that uses the latest technology to ensure our mortgage rates are among the most competitive in the industry.

We have an “A+” rating with the Better Business Bureau, a “AAA” rating with the Business Consumers Alliance, and a “Five Star Rating” with Zillow. Give us a call today to get a no-cost/no-obligation quote: 1-800-550-5538 or submit an online request for more information.

About The Author

Loan Officer Kevin O’Connor has over 17+ years of experience as a Mortgage Loan Originator and is licensed by the state of California and the Nationwide Mortgage Licensing System. He has a top rating with the Better Business Bureau, Google, Yelp, and Zillow. You can contact him at 1-800-550-5538. CA DRE #01499872 / NMLS #247447