Fannie Mae is raising the loan limit of small mortgage loans to $6 million from $3 million or less nationwide and $5 million or less in high-cost markets. The increase bolsters the company’s ongoing efforts to ensure an adequate supply of affordable housing for working families.
The increase in loan size will simplify the small-loan definition and provide more opportunities for borrowers to realize the benefits of streamlined third-party reports, underwriting, and asset management requirements, according to Fannie Mae.
The increase is effective immediately, and the higher loan amounts will be offered nationwide.
“Increasing the loan limit for our small mortgage loan program will provide more capital and liquidity to the small loan marketplace and help address the significant affordable workforce housing supply issues facing our country today,” said Michael Winters, vice president, multifamily customer engagement. “Our commitment to providing sustainable financing solutions that enhance affordability, security, and convenience of financing smaller properties plays an important role in securing a key source of housing for working families.”
In addition to increasing the small mortgage loan size limit, Fannie Mae has added several new eligible markets that receive certain pricing and underwriting benefits. The new metropolitan statistical areas (MSAs) are: Denver, Miami, Minneapolis, and Salt Lake City. These markets have seen credit and economic performance that is comparable with Fannie Mae’s other eligible MSAs, including Baltimore; Boston; Chicago; Los Angeles; New York City; Oxnard, Calif.; Philadelphia; Portland, Ore.; Sacramento, Calif.; San Diego; San Francisco; San Jose; Seattle; and Washington, D.C.
Fannie Mae has served the multifamily small loan market for more than 20 years and has provided more than $24 billion of liquidity to this market over the last decade.
