Pennymac has raised its conventional loan limits to $850,000 for one-unit properties, becoming the latest major mortgage lender to move ahead of the Federal Housing Finance Agency’s official 2027 conforming loan limit announcement.
The new limit is effective for new conventional loan locks on or after Sept. 16, 2026, according to an announcement from Pennymac Correspondent Group. Government loan limits are unchanged.
Pennymac’s $850,000 one-unit limit is above the current official 2026 baseline conforming loan limit of $832,750. The company emphasized that the official 2027 conventional loan limits have not yet been determined and will be established in a forthcoming FHFA announcement.
The move gives mortgage originators and borrowers additional room above the existing conforming threshold before the federal limits are finalized, potentially affecting borrowers whose loan amounts would otherwise fall into jumbo territory.
Pennymac also increased its early limits for two-, three- and four-unit properties. For states other than Alaska and Hawaii, the new limits are $1,088,350 for two-unit properties, $1,315,500 for three-unit properties and $1,634,950 for four-unit properties. The one-unit limit for Alaska and Hawaii is $1.275 million.
The lender included important conditions for loans originated above the existing federal limits. Pennymac said loans receiving an AUS Approve/Ineligible or Accept/Ineligible finding solely because of the loan limit can be eligible for delivery but will require a full appraisal.
Sellers may also be required to rerun the automated underwriting system after the official limits are released. Pennymac said it expects the official loan limits and related AUS updates by early to mid-December.
The company cautioned that loans that fail to receive an Approve/Eligible or Accept/Eligible finding after the rerun could be subject to repurchase, except when the sole cause of the ineligible finding is a discrepancy between Pennymac’s early limit and the final conventional loan limits.
Pennymac also recommended that sellers confirm eligibility with warehouse banks and mortgage insurance partners as early as possible.
The early increase is part of an annual competitive dynamic in the mortgage industry in which lenders sometimes begin accepting higher-balance conventional loans before FHFA formally establishes the following year’s conforming limits. For mortgage professionals, the distinction is critical: Pennymac’s $850,000 figure is a lender-specific early limit, not the official 2027 federal conforming loan limit.
FHFA’s eventual 2027 announcement will determine the limits used by Fannie Mae and Freddie Mac nationwide.
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