Rocket Pro TPO increases loan limit to $802,650 in anticipation of FHFA’s decision

Rocket Pro TPOthe wholesale branch of Rocket mortgageincreased the agency’s lending limits to $802,650 in 48 states, ahead of an announcement by the Federal Agency for Housing Financing (FHFA) expected in November.

For Alaska and Hawaii, the loan cap is sourced from Rocket Pro TPO and purchased by Fannie Mae And Freddie Mac rose to $1,204,000.

Starting Friday, Rocket Pro TPO will honor these expected loan limits for mortgage applications on conventional products from Fannie Mae or Freddie Mac, the company said.

“We’re doing it a lot earlier than normal, which is a pretty big deal,” said Mike Fawaz, executive vice president at Rocket Pro TPO, in an interview with HousingWire.

“Rocket’s liquidity and our position allow us to be the first to do this. We can keep these loans in a book for a long time. When I think about the importance of it, today if you have a customer who wants to buy something and falls between those two boundaries, instead of getting a large loan, you can now get a conventional loan.”

The increased conforming loan limit will allow Rocket’s brokerage partners to serve a larger group of people who have been unable to progress due to existing loan limits, or those who are waiting for the FHFA’s new loan limit to be announced, Fawaz added.

Rocket’s decision shows that the mortgage lender is confident that the maximum borrowing limit set by the federal government will increase by at least 4.71% in 2025. FHFA’s base conforming loan limit for mortgages backed by Fannie and Freddie in 2024 was $766,550, an increase of 5.5% from 2023.

Conforming loan limits usually follow changes in home prices. National house prices rose 4.3% year-on-year in July 2024 KernLogic facts.

With Rocket Pro TPO becoming the first to increase agency loan limits, other lenders are expected to follow suit.

In 2022, Rocket Pro TPO announced in September that it would increase conforming loan limits by 3.3% to $715,000. Rocket’s competitor, United Wholesale Mortgagemade the same move the next day.

The Housing and Economic Recovery Act (HERA) established a formula in 2008 that required the conforming loan limit to increase only after home prices returned to pre-recession levels. That requirement was finally met in 2016 when the FHFA raised the compliant limits for the first time in a decade.