PennyMac announced this week that it is upping conforming loan limits by almost 14% through broker and correspondent channels.
According to PennyMac, for a one-unit property a borrower could receive $625,000, an increase of almost $75,000 from the maximum loan limit dictated by the Federal Housing Finance Agency (FHFA).
The 2021 baseline national conforming loan limit for a one-unit property is currently capped at $548,250, though this number is expected to increase sometime in November.
Kimberly Nichols, senior managing director of broker direct lending at PennyMac, said in a statement that the recent “run-up in home price appreciation affecting many markets throughout the country” incentivized the lender to “step in and provide support for borrowers.”
“This will specifically help those trying to purchase a home or access equity in their property while rates are relatively low,” she added.
Furthermore, Abbie Tidmore, senior managing director of PennyMac Correspondent Group, said that the expansion will give certain borrowers the opportunity “to access conforming loan programs who would otherwise need to obtain Jumbo financing.”
(The upside of a borrower opting for a conforming loan versus a jumbo loan is that conforming loans are usually easier to qualify for and typically have lower interest rates.)
Concurrently, United Wholesale Mortgage, announced this week that it is following suit and lifting 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 baseline loan limit will be $937,500 for regular, one-unit conventional loans, up from $822,375.
In other news, Penny Mac Financial announced earlier in the month that it will offer $500 million of senior notes due in 2031.
The publicly traded mortgage lender said that the notes, which will be “fully and unconditionally guaranteed” will bear interest at 5.75% per annum and will mature on Sept. 15, 2031.