(Reuters) - The U.S. Federal Housing Finance Agency said on Wednesday it raised the maximum limit on mortgages Fannie Mae and Freddie Mac can acquire in 2017, the first increase since 2006, as home prices have risen above their third-quarter 2007 levels.
In most U.S. areas, the 2017 maximum “conforming” loan limit for one-unit properties will increase to $424,100 from $417,000, the regulator of the two mortgage finance agencies said in a statement.
Under the Housing and Economic Recovery Act of 2008, FHFA could not increase the baseline loan limit until the average home price returned to its third-quarter 2007 levels.
Home values in the third quarter were about 1.7 percent higher than their levels nine years ago, according to the FHFA.
In high-cost areas where median home prices exceed the baseline loan limit, the maximum loan limit will be higher. The new ceiling loan limit in these areas will be $636,150, or 150 percent of $424,100, for one-unit properties in the contiguous 48 U.S. states, FHFA said.
Earlier on Wednesday, the FHFA said U.S. home values appreciated by 1.5 percent in third quarter, while its seasonally adjusted monthly index on home prices rose 0.6 percent in September.
Reporting by Richard Leong; Editing by Chizu Nomiyama and Meredith Mazzilli