Orange County Loan Limit Changes for 2015; Still Above Median Home Price

Orange County loan limits for 2015 have been announced. Government housing agencies recently released the new limits for VA, FHA and conforming home loans, for all counties in the U.S. And it’s a lot easier to keep track of this year, because they’re all the same number — at least for the O.C.

The maximum loan limit for Orange County, California, for a single-family home, is $625,500. This applies to FHA, VA and conforming mortgage products.

This limit, as well as those listed below, affect all cities within the county to include: Anaheim, Fullerton, Huntington Beach, Irvine and Santa Anna. They apply to the entire Los Angeles-Long Beach-Anaheim metropolitan area as well. (While Los Angeles is its own county, the L.A. metro area is typically assigned the same loan limits as Orange County).

2015 Conforming Loan Limits for Orange County, California

Loan limits were increased in several California counties for 2015, including San Diego and Napa, due to significant home-price increases over the last year. But the conforming limit for Orange County will remain unchanged in 2015.

That’s not to say home prices didn’t rise in the O.C. over the last year. They did. But they didn’t rise enough to trigger a loan-limit increase for the metro area.

According to the Federal Housing Finance Agency (FHFA): “Although other counties [across the U.S.] experienced home value increases in 2014, after other elements of the HERA formula were accounted for the local-area limits were left unchanged.”

Here are the maximum conforming loan amounts for Orange County, California in 2015:

  • Single-family home: $625,500
  • Two-family: $800,775
  • Three-family: $967,950
  • Four-family: $1,202,925

Anything above these amounts will be considered a jumbo loan. Jumbo products typically undergo more scrutiny due to the higher amount being borrowed. Lenders usually (but not always) require higher credit scores, lower debt ratios, and larger payments with jumbo loan products — though we have seen some easing in this area in recent months.

VA and FHA Loans: Same as Above

In December, the Department of Veterans Affairs announced that VA loan limits for 2015 would be reset to match the conforming limits established by the Federal Housing Finance Agency (read the full story). In other words, they will be the exact same as the maximum amounts shown above.

This is a departure from the last few years, during which the VA had congressional authorization to raise VA limits above the conforming caps, within certain higher-cost areas. For the next 12 months, the maximum lending amounts will be aligned.

The same goes for FHA loans. According to the Department of Housing and Urban Development (HUD), the 2015 FHA loan limits for Orange County, California will be the same as the conforming figures shown above.

It bears repeating. All maximum loan amounts next year will be the same for the Orange County area. FHA, VA and conforming will all set their “ceilings” at $625,500 for a single-family home purchase. That’s the magic number for O.C. home buyers who want to “conform.” Anything above that is a jumbo mortgage.

Home Price Trends for the Area

The million-dollar question (literally, in some cases) is this: How do the limits stated above compare to house prices in the area? Will a conforming loan be enough to buy a decent home in Orange County? To answer this question, we need to examine current house values in the area.

In November, San Diego-based real estate data firm DataQuick reported the median sale price for Orange County was $585,000. That means half of all homes sold during that period were above $585,000, while the other half were sold below that price. That was an increase of 4.5% compared to the median figure for November 2013.

According to Zillow, the median home value (or “Zestimate”) for Orange County was $627,200 in December. The company is predicting only modest gains for 2015. As of December 2014, their one-year forecast predicted a home-price increase of only 0.2%, compared to a 3.5% gain over the last 12 months.

The bottom line: O.C. home prices are expected to continue rising in 2015, but only modestly. House values could actually remain flat for much of the year, if these forecasts prove accurate. This means the FHA, VA and conforming loan limits will likely remain above the median home price for this housing market, for the foreseeable future.