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FHFA Announces Higher Conforming Loan Limits for 2026

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Many Americans are feeling the pressure of higher costs of living as we move into 2026. That includes higher prices for homes. The good news is that the Federal Housing Finance Agency (FHFA) has announced higher conforming loan limits for 2026. These higher loan limits may make it easier to move into a new home.

Here are the 2026 Conforming Loan Limits for Indianapolis

Conforming Loan in Indianapolis IN

FHFA announced, “In most of the United States, the 2026 CLL value for one-unit properties will be $832,750, an increase of $26,250 from 2025.” They explained, “According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 3.26 percent, on average, between the third quarters of 2024 and 2025.  Therefore, the baseline CLL in 2026 will increase by the same percentage.”

The conforming loan limits are set by county. Most counties are at the national baseline, while some higher-cost areas have higher conforming loan limits.

Indianapolis is in Marion County. Here are the Marion County conforming loan limits for 2026:

  • 1 unit: $832,750         
  • 2 units: $1,066,250    
  • 3 units: $1,288,800    
  • 4 units: $1,601,750

Here were the conforming loan limits for 2025, so you can see how they compare:

  • 1 unit: $806,500
  • 2 units: $1,032,650
  • 3 units: $1,248,150
  • 4 units: $1,551,250

The conforming loan limits for Marion County in 2026 are the same as the baseline conforming loan limits that apply to most counties nationwide. There are no counties in Indiana that feature higher loan limits. So, no matter where you want to buy a home in Indiana, the limits we listed above for 2026 apply.

Benefits of Higher Conforming Loan Limits

Being able to buy a home with a conforming loan prevents you from needing to take out a different mortgage type called a non-conforming loan. Non-conforming mortgages are also referred to as “jumbo” loans.

Jumbo mortgages have higher down payment requirements as well as more rigorous criteria for approval than conforming loans.

By increasing the conforming loan limits for 2026, FHFA is ensuring that more homebuyers will be able to purchase a home without having to deal with these potential obstacles of jumbo loans.

  • If you would not qualify for a jumbo mortgage, you might still qualify for a conventional conforming loan. Higher conforming loan limits may help you buy a home sooner rather than having to wait.
  • The conforming loan process may be more rapid than the jumbo loan process, since you have less rigorous standards to meet.
  • You may qualify for a more competitive interest rate for a conforming loan than you would for a jumbo mortgage.
  • In some cases, you might be able to afford more home thanks to higher conforming loan limits.

FAQ

  • Q: What is a conforming loan?
    • A: A conforming loan is a mortgage that meets the standards for Fannie Mae and Freddie Mac.
  • Q: How will higher conforming loan limits affect my mortgage rate?
    • A: For homebuyers who can avoid a jumbo loan and take out a conforming loan instead, higher conforming loan limits tend to lead to more competitive interest rates.
  • Q: Can I avoid a jumbo loan with the new 2026 limits?
    • A: That depends on if you need to borrow above or below the new conforming loan limits. We can help you figure this out during your consultation.

Buy a Home in Indianapolis or Beyond

The higher conforming loan limits in 2026 should make it easier for you to buy a home in Indianapolis or elsewhere in Indiana. To get started, please give us a call at (317) 255-0062 to schedule your mortgage consultation.

How Do Homestead Exemptions Work in Indiana?

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If you are buying a home on at least 1 acre of land in Indiana, you can take advantage of the Indiana Homestead Deduction. This deduction reduces your property taxes by adjusting your assessed property value downward.

What is the Indiana Homestead Exemption?

The Indiana Homestead Exemption is a deduction from your assessed property value. It consists of two parts:

  • The Standard Homestead deduction
  • The Supplemental Homestead deduction

The Standard Homestead deduction is the lesser of either $45,000, or 60% of the gross assessed value of the property.

You calculate the exemption, and subtract it from your property value, then use that modified assessed value to calculate the property taxes you owe.

If you qualify for the Standard Homestead deduction, you also qualify for the Supplemental Homestead deduction.

It equals 35% of the net assessed value (if the net is less than $600,000) or 25% of the net AV (if the net is greater than $600,000).

You apply it to your net assessed value after you have taken the Standard Homestead deduction.

Standard Homestead Deduction Qualification and Details

Here is some additional information provided by the state of Indiana regarding the Standard Homestead deduction.

Applies to the dwelling (and those structures attached to the dwelling – deck, patio, etc.) and the surrounding 1 acre (even if acre straddles multiple parcels)

  • Property must be applicant’s principal place of residence
    • An individual’s “true, fixed, permanent home to which the individual has the intention of returning after an absence.” 50 IAC 24-2-5
  • Applicant must:
    • own the property;
    • be buying it under recorded contract or recorded memorandum of contract that provides that the buyer is responsible for the taxes; or
    • Occupy the property owned by a trust seeking deduction in conformity with IC 6-1.1-12-17.9

For full details on the Homestead Exemption, you can view this presentation from the Indiana Department of Local Government Finance (DLGF), titled “Property Tax Deductions and Exemptions.” Be sure to read the Indiana Code as well, which is the legal document that defines the exemption.

So long as you continue to meet the eligibility requirements, you can automatically renew the Homestead Exemption every year.

It is important to make sure that you really do qualify before you attempt to claim this exemption. If you do so incorrectly, eventually, an auditor will catch it. At that point, you may owe up to three years’ worth of overdue taxes. You also may owe additional penalties on top of that.

Buy a Home in Indiana

Grandview Lending, Inc is based in Indianapolis. We can help you purchase a home

anywhere in Indiana with a USDA loan or another type of mortgage. We can also answer questions about property taxes and the Homestead Exemption, though we urge you to talk to your tax professional for detailed information and recommendations. You can also contact DLGF directly.

To get started, please give us a call at (317) 255-0062 to schedule your mortgage consultation.

Reasons to Buy a Rural Home in Indiana

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Buy a Home in Indiana

One of the joys of the Midwest is that there are a lot of wide open, rural spaces. That means you have the opportunity to buy a home in a rural or ex-urban area. Below are a few reasons to consider purchasing a rural home in Indiana, even if it means a longer commute.

  1. Take advantage of a USDA rural home loan. If you are buying a home in a USDA “rural” zone, then you can do it with a government-backed USDA mortgage.

    This type of home loan features:
    • Zero down payment.
    • Affordable interest rates.
    • Loose credit requirements.

      To qualify, you need to be within the income restrictions. We can help you figure out if you can take out this type of mortgage during your consultation.
  2. Cut costs. In general, it usually costs less to live in a rural area than it does to live in an urban or suburban area. You may even be able to afford more home since you are buying in a less populous part of Indiana.
  3. Enjoy architectural variety. You can find both new and old homes in rural Indiana, as well as many different architectural styles. If you dream of an old-fashioned farmhouse, you can find one that is evocative of classic Americana. But you can find more modern rural homes in Indiana too.
  4. Experience nature, seclusion, and the outdoors. If you move into a rural home, or even one in an ex-urban area, you will have much more open space around you than you would in a city or in the suburbs. You’ll get to enjoy peace, quiet and privacy. Many rural homes include more acreage than you would get with a lot in town. So you will be able to get plenty of use out of your outdoor spaces.
  5. Earn from rental opportunities. These days, a lot of people are having a hard time making ends meet, even with a full time job. One way that many are “hacking” their mortgages is by renting out space to tenants. A long term tenant can bring in hundreds of dollars a month reliably, which can offset part of your monthly mortgage payment. If you get a large farmhouse in a rural area, you can place a tenant in your house without them disrupting your family routines too much. You could also put a tiny house on your property, taking advantage of your spacious land, and rent that out instead. If you prefer short term tenants instead of long term ones, rural Indiana can also work out great. Many vacationers appreciate the chance to stay somewhere quiet and private, surrounded by nature. You might even get short term bookings from people taking weekend breaks from city life in Indiana.
  6. Become more self-sufficient. A rural home in Indiana gives you land you can use for purposes like gardening, farming, or raising livestock (assuming it is zoned for that). This is great news if you’ve been wanting to increase your self-reliance. That can be a smart move in uncertain times.

Buy a Rural Home in Indiana

A rural home is an affordable, flexible option for Indiana residents who are looking to enjoy the many benefits of the Midwest’s wide open spaces while keeping their costs of living affordable.

Grandview Lending, Inc is based in Indianapolis. We can help you purchase a rural home anywhere in Indiana with a USDA loan or another suitable mortgage. To get started, please give us a call at (317) 255-0062 to schedule your mortgage consultation.