Earlier this week, the Federal Housing Finance Agency announced that the conforming loan limits for California will go up in 2021. This is a direct response to rising home values across the state.
The 2021 loan limits for California counties will range from $548,250 to $822,375, for a single-family property. That’s a significant increase over the current caps, which range from $510,400 – $765,600 depending on the county. These changes take effect on January 1, 2021.
California Gets Higher Loan Limits in 2021
The term “conforming loan limit” refers to the maximum size for a regular or conventional mortgage loan. Conventional mortgage products can be sold to Freddie Mac and Fannie Mae, and then resold to investors.
In order to go through this resale process, home loans must meet certain requirements and parameters. And that includes adhering to a maximum size limit.
When a person borrows more than the conforming loan limit for their particular county, it’s referred to as a “jumbo” mortgage. Lenders typically set higher standards and requirements for jumbo loans, due to the larger amount being borrowed. This can include higher credit scores and bigger down payments, among other things.
Conforming loan limits vary by county because they are based on median home values. For the 58 counties within California, the 2021 conforming loan limits will range from $548,250 to $822,375. Pricer real estate markets (with a higher median home price) tend to have higher limits, and vice versa.
Ten of California’s 58 counties are considered “high cost areas” and therefore have the maximum conforming loan limit of $822,375. This applies to most of the San Francisco Bay Area, the Los Angeles metro area, Orange County, and Santa Cruz. See the table below for more details.
Table: Conforming Loan Limits by County
The table below shows the 2021 conforming loan limits for all of California’s counties. This table was adapted from one provided by the FHFA.
Note: The “one-unit” column on the right pertains to a regular single-family home. There are higher limits for multi-family properties, like duplexes and triplex units. Thus, the figures shown below apply to typical home-buying scenarios with a single residency.
| County | One-Unit Limit |
| ALAMEDA | $822,375 |
| ALPINE | $548,250 |
| AMADOR | $548,250 |
| BUTTE | $548,250 |
| CALAVERAS | $548,250 |
| COLUSA | $548,250 |
| CONTRA COSTA | $822,375 |
| DEL NORTE | $548,250 |
| EL DORADO | $598,000 |
| FRESNO | $548,250 |
| GLENN | $548,250 |
| HUMBOLDT | $548,250 |
| IMPERIAL | $548,250 |
| INYO | $548,250 |
| KERN | $548,250 |
| KINGS | $548,250 |
| LAKE | $548,250 |
| LASSEN | $548,250 |
| LOS ANGELES | $822,375 |
| MADERA | $548,250 |
| MARIN | $822,375 |
| MARIPOSA | $548,250 |
| MENDOCINO | $548,250 |
| MERCED | $548,250 |
| MODOC | $548,250 |
| MONO | $548,250 |
| MONTEREY | $739,450 |
| NAPA | $816,500 |
| NEVADA | $548,250 |
| ORANGE | $822,375 |
| PLACER | $598,000 |
| PLUMAS | $548,250 |
| RIVERSIDE | $548,250 |
| SACRAMENTO | $598,000 |
| SAN BENITO | $822,375 |
| SAN BERNARDINO | $548,250 |
| SAN DIEGO | $753,250 |
| SAN FRANCISCO | $822,375 |
| SAN JOAQUIN | $548,250 |
| SAN LUIS OBISPO | $701,500 |
| SAN MATEO | $822,375 |
| SANTA BARBARA | $660,100 |
| SANTA CLARA | $822,375 |
| SANTA CRUZ | $822,375 |
| SHASTA | $548,250 |
| SIERRA | $548,250 |
| SISKIYOU | $548,250 |
| SOLANO | $550,850 |
| SONOMA | $707,250 |
| STANISLAUS | $548,250 |
| SUTTER | $548,250 |
| TEHAMA | $548,250 |
| TRINITY | $548,250 |
| TULARE | $548,250 |
| TUOLUMNE | $548,250 |
| VENTURA | $739,450 |
| YOLO | $598,000 |
| YUBA | $548,250 |
Another Year, Another Increase
The maximum mortgage amounts for conventional loans are determined by the Federal Housing Finance Agency (FHFA). This agency oversees Freddie Mac and Fannie Mae, the “government-sponsored enterprises” that purchase mortgage loans from lenders and sell them to investors.
Each year, officials from the FHFA review home-price trends for counties across the country and decide whether or not to increase loan limits. This year, they determined that home prices across the country have risen enough to warrant higher loan limits for 2021.
A Response to Rising Home Prices
In most California cities, home values rose steadily throughout 2020. This might seem counterintuitive, given the ongoing coronavirus pandemic and economic downturn. But the real estate market has been the one bright spot in the broader economy.
Record-low mortgage rates and strong demand from buyers have boosted home prices at a time when you might expect the opposite trend. As a result of these trends, California will have higher conforming loan limits in 2021.
According to the real estate data company Zillow, the median home value in California rose by around 6.3% over the past year or so. The company’s analysts are predicting even bigger gains for 2021.
In November, the company stated: “California home values have gone up 6.3% over the past year and Zillow predicts they will rise 8.3% in the next year.”
A recent report from the California Association of Realtors showed even bigger gains, by analyzing a different metric. According to their November 2020 report, the median sold price for existing single-family homes across the state rose by a whopping 17.5% from October 2019 to October 2020.
Given these trends, it’s not surprising to see higher conforming loan limits for California counties in 2021.