PennyMac announced this week that it is increasing compliance loan limits by nearly 14% through brokerage and correspondent channels.
According to PennyMac, for a one-unit property, a borrower could receive $ 625,000, an increase of almost $ 75,000 over the maximum loan limit dictated by the Federal Housing Finance Agency (FHFA).
The 2021 base conforming national loan limit for a one-unit property is currently capped at $ 548,250, although that number is expected to increase in November.
Kimberly Nichols, senior managing director of direct brokerage loans at PennyMac, said in a statement that the recent “acceleration in home price appreciation affecting many markets across the country” prompted the lender to “step in and support borrowers “.
“This will specifically help those who are trying to buy a home or access equity in their property when rates are relatively low,” she added.
Additionally, Abbie Tidmore, senior managing director of PennyMac Correspondent Group, said the expansion will give some borrowers the ability to “access compliant loan programs that would otherwise need to secure Jumbo financing.”
(The advantage of a borrower choosing a compliant loan over a jumbo loan is that compliant loans are generally easier to obtain and generally have lower interest rates.)
In parallel, United Wholesale Mortgages, announced this week that it is following suit and raising its cap to $ 625,000.
The top-ranked wholesale mortgage lender said in a press release that for special statutory provisions including Alaska and Hawaii, the base loan limit will be $ 937,500 for regular single unit conventional loans, for $ 822,375.
In other news, Penny Mac Financial announced earlier in the month that it would offer $ 500 million in senior notes due 2031.
The publicly traded mortgage lender said the notes, which will be “fully and unconditionally secured” will bear interest at 5.75% per annum and mature on September 15, 2031.