Los Angeles County Loan Limits 2023: Everything You Need to Know

Los Angeles County’s loan limits for 2023 have been announced, bringing welcome news for homebuyers in one of the most competitive and expensive housing markets in the country. With home prices and mortgage rates on the rise, understanding these new conforming loan limits can help you maximize your purchasing power when buying a home in LA County this year.

What Are Conforming Loan Limits?

Conforming loan limits determine the maximum loan amount that can be purchased by Fannie Mae and Freddie Mac, Loans at or under these limits are referred to as “conforming loans” and typically have lower interest rates since they can be securitized by the GSEs, Loans above these thresholds are called “jumbo loans” and come with higher rates and stricter requirements

The baseline conforming loan limit is set by the Federal Housing Finance Agency (FHFA) each year based on changes in the average U.S. home price. Additionally limits are increased for certain high-cost counties like Los Angeles where home values are well above the national median.

For 2023, the baseline conforming limit for a single-family home is $726,200, up from $697,620 in 2022. The new high-cost limit for LA County is $1,089,300 for a single-family home, an increase from $970,800 last year.

2023 Conforming Loan Limits for Los Angeles County

Here are the maximum 2023 conforming loan limits for Los Angeles County across different property types:

• 1-unit: $1,089,300
• 2-unit: $1,394,775
• 3-unit: $1,688,950
• 4-unit: $2,072,250

These apply to conventional loans for single-family homes, condos, townhomes, and PUDs The FHA and VA limits in LA County match the conforming limits

How Loan Limits Have Changed in Los Angeles County

The 2023 conforming loan limit for a single-family home in Los Angeles County has increased by $118,500 compared to 2022. This 12% boost is substantially higher than the national increase of 4.1% and reflects rapidly rising home values across the LA metro.

Over the past decade, LA County’s conforming loan limit has jumped significantly:

• 2022: $970,800
• 2021: $822,375
• 2020: $765,600
• 2019: $726,525
• 2018: $679,650
• 2017: $636,150
• 2016: $625,500
• 2015: $625,500
• 2014: $625,500
• 2013: $729,750

The steady growth has granted homebuyers more purchasing power and flexibility when using conventional financing to buy a home in Los Angeles County. Jumbo loans typically come with higher rates, lower LTVs, and tighter credit requirements – making access to conforming loan amounts extremely valuable.

The Benefits of Conforming Loan Limits in LA County

The main benefits of borrowing at or under the conforming loan limits in Los Angeles County include:

• Lower Interest Rates – Conforming mortgages usually offer the lowest rates, saving significantly on your monthly payments.

• Larger Loan Amounts – 2023 limits allow higher loan amounts to match expensive LA home prices.

• Better Terms – Conforming loans have flexible credit guidelines and down payment options.

• Easier Qualification – Fannie Mae and Freddie Mac conforming loans are broadly available with multiple lenders.

• Lower Mortgage Insurance – MI on conforming loans may be cancelable at lower LTVs vs. jumbos.

By staying under the maximum limits, homebuyers can gain big savings and flexibility during a period of rising mortgage rates and home prices. The increased 2023 limits arrive at an ideal time when stretched budgets need maximum purchasing power.

Using Conforming Loan Limits to Buy in Los Angeles County

Here are some things to keep in mind when using the 2023 conforming loan limits to buy a home in LA County:

• Shop multiple lenders to find the best conforming loan rate and terms. Online lenders often have lower rates than banks.

• Explore down payment assistance programs if needed to buy with less cash out-of-pocket. Conforming loans allow down payments as low as 3%.

• Get pre-approved to confirm your affordability at current conforming loan limits and interest rates. This also makes offers stronger.

• Consider condos, townhomes or fixing up a lower-priced property if single-family homes are unaffordable near the conforming limit.

• Compare current home prices to 2022 values to estimate how much more you can now borrow with the new limits.

• Be ready to move quickly on a home you love that fits within your pre-approval. LA County remains intensely competitive for buyers.

• Don’t fudge numbers on your loan application to “qualify” for more home. Get properly pre-approved based on your true financial picture.

The bottom line is that Los Angeles County’s higher conforming loan limits for 2023 offer a valuable opportunity to maximize your financing options as a homebuyer. Be sure to shop lenders, get pre-qualified, and act quickly when you find the right home within your new affordability range. With smart borrowing under the new limits, you can land your dream LA property even when dealing with higher prices and mortgage rates in 2023’s housing market.