The baseline loan limit is the highest loan amount for an acquisition in a particular year. This limit restricts the size of loan originations (but not the price of homes) across the nation except in a small amount of high-cost or statutory areas. The value varies across two dimensions, counties and the number of property units. Local loan limits are defined on a county-by county basis with most counties (around 95 percent) assigned the baseline loan limit. The baseline limits, however, can increase for properties that have more than one (but less than five) units
HERA also defines “high-cost” area loan limits that can be as much as 150 percent of the baseline value. Loan limits are allowed to exceed the baseline value in areas with more expensive housing markets. Specifically, they are set at 115 percent of the highest county median home price in the local area as long as that amount does not exceed the ceiling. Local areas follow the definitions of corebased statistical area (CBSA), which means they can be both metropolitan and micropolitan statistical areas.
As an example, loan limits for 2022 Enterprise acquisitions were established in 2021Q3 with the baseline loan limit being $647,200 for a one-unit property. According to data released by the U.S. Department of Housing and Urban Development, as of 2021Q3 the median home value in El Dorado County, California was $587,000. Multiplying this area median value by 115% yields a loan limit of $675,050, which is above the baseline limit but below the high-cost ceiling of $970,800. As a result, the loan limit for El Dorado County was set equal to $675,050.
Loan limits are also higher in certain statutorily-designated areas like Alaska, Hawaii, Guam, and the U.S. Virgin Islands. The limits in these statutorily-designated areas cannot exceed 150 percent of the high-cost ceiling value. Lookup tables are provided on the CLLs page at https:/www.fhfa.gov/CLLs.