The Wall Street Journal: Federal government backing appears set to be extended to home loans of nearly $1 million

WASHINGTON — The federal government is about to back mortgages of nearly $1 million for the first time.

The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac are expected to jump sharply in 2022, a reflection of the rapid appreciation in home prices nationally over the past year.

“The government-controlled mortgage companies Freddie Mac and Fannie Mae today can back single-family mortgages that have balances as high as $548,250 in most parts of the country and up to $822,375  in higher-cost housing markets.Those limits are expected to jump to a baseline level of about $650,000 in most areas and to just under $1 million in costlier markets.”

The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government.

“Housing prices are expensive,” said Steve Walsh, president of Scout Mortgage in Scottsdale, Ariz., adding that some of his clients are unable to qualify for loans for modest-sized homes under the current limits.

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“I don’t believe these people are looking for a castle, just a three-bedroom house with a backyard,” Walsh said.

By law, the loan limits are updated annually using a formula that factors in average housing-price increases nationwide.

An expanded version of this report appears at

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