Can the CLLs decrease?

No. By statute, because of HERA’s specific adjustment rules, conforming loan limits do not decrease. When home values have declined according to the formula, HERA does not provide for decreases in the baseline loan limit. Loan limits remain the same as the prior year until house price declines have been “made up” and the current index level exceeds the prior FHFA HPI level before the decline started. This happened when the baseline loan limit was $417,000 from 2006 until 2017 when it increased by the net positive increase of 1.7 percent since the prior peak. The calculated increase is based on the gain compared to that prior level (not the third quarter from the earlier year). Such a scenario took place from 2007Q3 until 2016Q3 and the 2017 limits became the first increase in several years. FHFA has implemented a “hold harmless” approach where county-level loan limits do not decrease. This applies to counties where the median home value decreased relative to the prior year’s value. FHFA takes the same approach if a county were to drop out of a high-cost area and would suffer from a lower median value as a stand-alone county.