2018 Mortgage/Lending Update

The Federal Housing Financing Authority has announced an increase to the limits for conventional, conforming loans have been increased.  The maximum amount of a loan is dependent upon the county in which you are seeking to buy property, so if you’re not interested in Weld, Broomfield, or Boulder counties in Colorado, then you’ll need to follow this link for the full pdf table.  The FHFA has a set maximum loan amounts for conventional conforming loans as follows:

  • Boulder County         $578,450
  • Broomfield County   $529,000
  • Weld County              $453,100

An increase in the loan limits is good for both buyers and sellers.  Home prices in Colorado have been increasing and raising the loan limits will give buyers more purchasing options.  Likewise, sellers benefit from an increase in the number of buyers that are able to realistically consider purchasing their property. 3 dollars

Another important change to borrowing process, is an increase in the debt to income ratio that went into effect in the second half of 2017.  The maximum allowable debt ratio increased from 44% to 50%.  According to at least one industry professional, this has resulted in about a 10% increase in the number of loans being approved and transactions closing.

Finally, there will be a change to the loan application format (ULA 1003) for the first time in 20+ years.  The form is increasing from 4-5 pages to about 8-9 pages in length.  The increase is due to a requirement that borrowers provide additional demographic information.  Once implemented (date uncertain), it’ll probably feel more invasive in terms of the amount of information that borrowers must provide.  The changes were made to protect borrowers from discriminatory lending practices.