2024 Increases to Loan Limits
To reflect changes to home prices and the market overall, loan limits for both conventional and FHA mortgages are increasing for 2024! Here’s a quick breakdown of these loans and their new maximums.
What are loan limits?
A loan limit is the total amount of money that an applicant is approved to borrow. Loan limits are dependent on the type of property that is being bought and where it is located.
FHA Loan Limits: The FHA has a standard limit for single-family homes. There are sequential increases in limits depending on 2-, 3-, and 4-unit buildings. Extended loan limits will also change in high income areas.
Loan limits are determined by the conforming loan limits from the Federal Housing Finance Agency. FHA limits are set at 65% of the new conforming loan limits.
Conventional Loan Limits: The Housing and Economic Recovery Act (HERA) requires the limits for Conventional Loans, also called Conforming Loans, be adjusted on a yearly basis to reflect the average home price in the U.S. The Federal Housing Finance Agency (FHFA) calculates loan limits based on criteria defined by HERA.
What is an FHA Loan?
Administered by the Federal Housing Administration (FHA), this mortgage is a popular option for first-time homebuyers. It is specifically designed to assist borrowers to purchase a home with less stress by providing lower down payment options and more flexible qualifying criteria.
What do I need to know about the new changes to the FHA Loan?
Below is a list of the new FHA loan limits effective for FHA case numbers assigned on or after January 1, 2024. Limits will vary by county, based on the median home price for the area.
What is a Conventional Loan?
A Conventional Loan is often referred to as a Conforming Loan because it conforms to requirements set by Fannie Mae and Freddie Mac, two agencies that standardize mortgages. There are many benefits to using a Conventional Loan including flexible qualifying guidelines for your down payment, loan term and rate options.
What are the new limits for Conventional Loans?
The national baseline for one-unit properties will be $766,500 in 2024. In high-cost areas, the limit increases to $1,149,825. The exact limit of what you can borrow will depend on your area, as shown in FHFA’s Loan Limit Map.
How will these changes help me secure my dream home?
These new limits reflect home appreciation over the past year, helping you afford a home in 2024.
If you’re interested in seeing how these loan limits can help you buy a Lennar home, we’re here to help! We’ll pair you with an experienced Loan Officer who can help make sense of these numbers, compare loan options and finance your dream home. Contact us to get started!
Sources:
U.S. Department of Housing and Urban Development (HUD): FHA Announces 2024 Loan Limits, Empowering Homebuyers Amidst Rising Home Prices
Federal Housing Finance Agency (FHFA): FHFA Announces Conforming Loan Limit Values for 2024
Fannie Mae: Originating & Underwriting Loan Limits