Negotiating + Financing

More NYC buyers can tap lower-cost mortgages with new Freddie and Fannie higher loan limits in 2022

By Jennifer White Karp  |
November 19, 2021 - 2:30PM

The new conforming loan ceiling will open up credit opportunities to NYC buyers who didn't meet jumbo financing guidelines in the past.


New York City buyers don’t typically get to take advantage of the lower rates, smaller down payments, and ease of borrowing associated with conforming loans. But that’s likely to change with new loan limits going into effect soon.

Fannie Mae and Freddie Mac, the government-backed entities that buy loans from banks, are expected to announce a new conforming loan ceiling close to $1 million in high-cost markets like New York City, according to the Wall Street Journal. The current loan limit is $822,375.

The move will give buyers some breathing room, says Brittney Baldwin, vice president and loan officer at National Cooperative Bank (a Brick Underground sponsor).

“With an increase to the conforming and high-cost loan limits by Fannie Mae and Freddie Mac, this could open up potential credit opportunities to buyers who before may not have met jumbo financing criteria in the past,” Baldwin says.

That’s because many buyers have traditionally needed jumbo loans in order to afford NYC’s pricey properties—but these loans are tougher to qualify for. Most banks require as much as six months of mortgage payments in your bank account, versus the typical two months' worth for a conforming loan.

But with a higher ceiling for conforming loans (essentially the loans that can be sold to Fannie and Freddie) more NYC buyers can tap lower-cost borrowing.

Melissa Cohn, regional vice president at William Raveis Mortgage, points out that the exact amount for the new loan limit is not yet known—it will be shared on November 30th and go into effect at the beginning of 2022—but regardless, an increase is “still good news for the NYC market.” 

And it is especially good news for New Yorkers who freelance or are self-employed and have been hoping to buy in the new year. This segment of the workforce likely saw their income take a dip during the pandemic in 2020.

“If someone is self-employed, with a confirming loan you can get a waiver and provide one year of tax returns,” Cohn explains. If 2021 was a good year—then that’s all you would have to show, unlike the two years’ worth of statements that are a must to qualify for a jumbo loan.

There are other advantages as well. With a conforming loan, you can get approved if your credit score in the 600 range (lenders for jumbo loans would want to see credit scores above 700)—and your debt-to-income ratio can be as high as 50 percent (but “not everyone wants to spend half their income on housing,” Cohn adds).

Pro Tip:

Looking to buy a co-op apartment?  National Cooperative Bank offers competitive rates and easy pre-qualification. With 40 years of lending to buyers in New York City, NCB is the bank for co-ops. After all, Cooperative is our middle name! Call us at (646) 201-4714 or email Brittney Baldwin at [email protected].  NMLS #507535. Equal Housing Lender. 

The new limit is a reflection of how different the market is in a place like NYC. Buyers in other parts of the U.S. may spend $1 million on a McMansion; but here in New York City, that “doesn’t necessary buy you luxury real estate. If you’re buying something that costs $900,000 here—you’re not buying a palace,” Cohn says.

“New Yorkers are usually not able to take advantage of confirming loans. Now they will be able to take advantage of buying opportunities for appropriate housing, not fancy,” she says.



Jennifer White Karp

Managing Editor

Jennifer steers Brick Underground’s editorial coverage of New York City residential real estate and writes articles on market trends and strategies for buyers, sellers, and renters. Jennifer’s 15-year career in New York City real estate journalism includes stints as a writer and editor at The Real Deal and its spinoff publication, Luxury Listings NYC.

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.