All Texas Counties Get Higher Conforming Loan Limits for 2019

The conforming loan limit for Texas has been increased for 2019. Next year, all 254 counties across the state of Texas will have a conforming loan limit of $484,350. That’s for a single-family home purchase. Multifamily properties such as duplexes and triplexes have higher limits.

Higher Loan Limits for Texas in 2019

Last month, the Federal Housing Finance Agency (FHFA) announced that it was going to increase conforming loan limits for nearly all counties across the country. The new “baseline” limit will go up to $484,350 in 2019. Higher-cost real estate markets like San Francisco and New York City will have loan limits of up to $726,525.

According to their November 27 press release:

“The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018.”

In Texas, all counties will have the baseline loan limit of $484,350 in 2019. While there are plenty of expensive homes in real estate markets across Texas, there are no “high-cost” areas in terms of median house values. So it’s the same limit for all 254 counties.

Conforming vs. Jumbo Mortgages

So what is a conforming loan exactly?

When a mortgage loan meets the size restrictions used by Freddie Mac and Fannie Mae, it is referred to as a conforming loan. It can therefore be sold to those two government-sponsored enterprises via the secondary mortgage market.

When a person borrows more than the conforming loan limit for their county, they are using a “jumbo” loan. The qualification requirements can be stricter for jumbo mortgage products, because there is a larger amount of money being borrowed and therefore a higher level of risk. For example, lenders often require larger down payments, higher credit scores, and higher income levels for borrowers who are seeking a jumbo mortgage loan.

A conforming loan, on the other hand, might have a lower bar for approval since it can be sold to Freddie Mac or Fannie Mae.

Median Home Price Is Well Below the New Limit

Conforming loan limits are based on median home values. They can vary from one county to the next because of their connection to house prices.

But in Texas, every county will have the same conforming loan limit in 2019. That’s because median home prices for most counties across the state fall below the new baseline loan limit of $484,350.

As of December 2018, the median home value for Texas was around $190,400. That’s obviously well below the 2019 conforming loan limit mentioned above. Even in the state’s more expensive real estate markets, like Austin, the median house price still falls below the new loan limits for 2019.

This means that a typical borrower in most cities across Texas should be able to finance a home purchase within the conforming loan limit range. But jumbo mortgages are still available for those borrowers who need a higher level of financing (and can meet the stricter qualification criteria).

VA and FHA Loan Programs in Texas

The conforming loan limits above apply to conventional mortgage products. “Conventional” means they are not insured or guaranteed by the government. The two main government-backed loan programs (VA and FHA) should also get higher limits for 2019.

The VA loan limits for Texas will be aligned with the conforming figures mentioned above. That’s because the Department of Veterans Affairs typically uses the limits established by the FHFA.

As for the FHA loan program, we are still awaiting an announcement from the Federal Housing Administration. They typically announce their new loan limits in December, for the year following. We expect to see that announcement within the next two or three weeks.