Welcome to LoanLimits.org. This website provides current information about loan limits for counties across the United States. We offer data for all primary loan types, including FHA, VA, jumbo, and conforming / conventional. Below, you will find the loan limits for Los Angeles County in 2015, for all of these product types.
Loan Limits for Los Angeles County
Here is a quick overview of current caps for the L.A. metro area. For additional housing market data and commentary, continue reading below.
Note: In 2015, we have an unusual occurrence where the loan limits for Los Angeles County are the same across all three categories. This is due to the VA and FHA aligning their caps with the conforming caps set by the Federal Housing Finance Agency. See details below.
Cities Affected: The loan limits shown above apply to the following cities: Burbank, Downey, El Monte, Glendale, Inglewood, Lancaster, Long Beach, Los Angeles, Norwalk, Palmdale, Pasadena, Pomona, Santa Clarita, Torrance, and West Covina.
Conventional / Conforming
Description: A conventional home loan is one that is not insured or guaranteed by the government. This makes it different from the VA and FHA-insured products mentioned below. There are maximum size limits for conventional loans that can be sold to Freddie Mac and Fannie Mae, and these are known as conforming loan limits. Anything above this cutoff point is known as a jumbo loan.
In 2015, the conforming limit for a single-family home in Los Angeles County is $625,500.
These caps are set by the Federal Housing Finance Agency (FHFA). They are updated once per year, usually in December for the year following. They can be increased, decreased, or held the same from one year to the next. From 2014 – 2015, conforming loan limits were kept the same for most of the country, with the exception of 46 counties where they were increased. Los Angeles County was not one of the 46 — so the L.A. limits for 2015 are the same as they were in 2014.
VA (Veterans Administration)
A VA home loan is one that is guaranteed or backed by the Department of Veterans Affairs (VA). They are only available to eligible military service members and their families. The primary benefit of this product is that it offers 100% financing. This means a home buyer in Los Angeles who uses a VA loan could buy a house with no down payment whatsoever. That’s the primary appeal of this product.
As with other types of mortgages, VA-backed mortgages have caps or limits on the maximum amount that can be borrowed. In 2015 the VA loan limit for Los Angeles County is $625,500 — the same as conforming products.
These loans are not always aligned with the conforming limits. Last year, the two cutoff points were different. That’s because the Department of Veterans Affairs had temporary authority to increase the caps for certain counties (under Public Law 110-389). But this authority expired at the end of 2014. That’s when the department announced it would align its VA loan limits with conforming. This is why the numbers are the same in all three columns, in the table at the top of this page.
FHA (Federal Housing Administration)
Now we come to FHA loans. These mortgage products are originated by lenders in the private sector, just like a “regular” home loan. But they are insured by the Federal Housing Administration, which is part of HUD. This is what makes them different from other Los Angeles mortgage products.
This insurance protects the lender in the event that the borrower / homeowner defaults on the loan. This program is popular among borrowers with limited funds, because it offers a down payment as low as 3.5% of the purchase price. That’s the primary appeal that attracts borrowers to the program.
The 2015 FHA loan limit for a one-family home in Los Angeles County is $625,500, the exact same as the conforming and VA caps above. The limits go up for multi-family properties, as shown in the table at the top of this page.
Note: These are the exact same FHA limits as 2014. Typically, they change from one year to the next. But the Federal Housing Administration announced they would keep the 2014 caps in place for 2015, carrying them over with no changes.
Jumbo Loans Common in Los Angeles
As mentioned above, the maximum size of a conforming home loan in Los Angeles is $625,500. This means that borrowers who take out mortgages for more than $625,500 will fall into the “jumbo” category.
Definition: A Los Angeles jumbo loan is one that exceeds the above-stated limit of $625,500. Such products cannot be sold into the secondary mortgage market, because Fannie Mae and Freddie Mac will not purchase anything above conforming limits. As a result, lenders typically have stricter requirements for these larger loans.
Jumbo borrowers tend to undergo extra scrutiny during the application and underwriting process. Lenders often require higher credit scores and larger down payments for these borrowers as well, though not always.
At present, the conforming loan limit for Los Angeles is only slightly higher than the median home price (see next section). This means that a fairly high percentage of home buyers will have to use jumbo mortgages to cover the cost of their purchase, or else make a larger down payment to stay within conforming limits. This is true for most California metro areas, which are relatively high-priced when compared to other parts of the country.
How These Limits Compare to Home Prices
So, what kind of “buying power” will borrowers have, if they stay within these limits? How will the caps for FHA, VA and conforming products compare to Los Angeles home prices in 2015? Let’s take a broader look at the housing market.
According to Trulia, the median sales price for houses in the L.A. metro area was $578,000, as of December 2014.
At the start of 2015, the real estate information service Zillow reported that the median home value for Los Angeles was $525,700. That was an increase of 7.9% over the same period 12 months earlier. Zillow predicts an additional, but more modest, increase of 2.6% during the course of 2015.
Bottom line: The median home price for the Los Angeles metro area is currently below loan limits for the area, and it will likely remain this way through the end of 2015. This means home buyers who stay within these limits will have a decent amount of homes to choose from, without venturing into jumbo territory. On the other hand, many homes in Los Angeles are priced well above conforming limits. It’s a diverse real estate market with much price variation from one community to the next.
Quick Tips for Mortgage Shoppers
Did you know? As far as the loan amount goes, mortgage approval and affordability are two different things. It’s possible to be approved for a mortgage amount that exceeds your comfort zone at the monthly level. This is why we encourage home buyers to establish a monthly budget, long before talking to lenders.
For starters, you need to determine two numbers:
- Your net monthly income, or “take home” pay
- Your total recurring monthly debts, excluding your housing expenses
Subtract your monthly debts from your net income. That is your starting point for monthly affordability. But you shouldn’t use this entire amount for your monthly housing payments. If you did that, you wouldn’t have anything left over for financial emergencies, entertainment expenses, or savings account contributions.
Most experts recommend using only a portion of the remainder (after subtracting debts from income), such as 70% or 80% of the remainder. The important thing is to know how much you can afford to pay each month, and stick to that amount when shopping for a home loan.
Disclaimer: This article includes 2015 loan limits for Los Angeles County, including the cities of Long Beach, Glendale, Santa Clarita, Lancaster, et al. This information was based on third-party data that is deemed reliable. These limits were provided by the Federal Housing Finance Agency (FHFA), the Department of Veterans Affairs (VA), and the Department of Housing and Urban Development (HUD). We have made every effort to ensure the accuracy of this information, but it is not meant to replace the official sources mentioned above. For the most current and accurate information about Los Angeles County loan limits for FHA, VA and conforming, please visit these official websites: HUD.gov, FHFA.gov and VA.gov.