FHFA Announces 2024 Conforming Loan Limit

A powerful combination of events at the end of 2023 is signaling good news as we enter the 2024 housing market. First, mortgage interest rates began to fall at the start of November and have continued to fall into December. Secondly, the 2024 conforming loan limit was announced on November 28, 2023, and it’s $40,350 higher than it was in 2023 at a baseline of $766,550. Here’s why this is good news… 

What is a Conforming Loan Limit?  

Every year the FHFA announces a baseline conforming loan limit which dictates the maximum loan amount eligible to be backed by government-sponsored enterprises like Fannie Mae or Freddie Mac. Loans above this amount are jumbo and subject to stricter qualifying requirements from smaller, specialty investors. Those under the limit, conforming loans, provide borrowers with the opportunity to…

• put a lot less down
• qualify with less in reserves
• typically lock lower interest rates

In the most basic and general terms, it’s easier and more affordable to obtain a conforming loan than a jumbo loan. 

New Limit: $766,550

The 2024 conforming loan limit is $766,550, which is great news for buyers who are shopping in the $800,000-$900,000 price range. Previously, shopping in this price range meant that you would be taking out a jumbo loan and likely need a 20% down payment, as many as 6 months’ worth of mortgage payments in the bank, and excellent credit. By taking out a jumbo loan, you are more susceptible to challenges and obstacles along the route to closing on your home. Now, the 2024 conforming loan limit allows for purchases in this price range (or less) with lower conventional down payment requirements, such as 5%, 10%, or 15% down, less money in the bank, and average to good credit. This helps you buy the home you want with the type of loan you want. 

Plus, Lower Rates? 

If interest rates keep falling like they have been, then 2024 is going to be a great year for affordability. Home prices are markedly high and many buyers are faced with the need to increase their budget in order to secure the right home. The combination of a higher 2024 conforming loan limit and lower interest rates helps buyers knock down financial barriers both upfront and monthly. In 2024, you have a better opportunity to stretch the budget and open up your home search. 

High-Cost Areas 

The baseline conforming loan limit applies to most counties in the U.S., but for certain high-cost areas, like Nashville, the limit is higher. The Davidson County 2024 conforming loan limit is a whopping $943,000. That puts buyers in the $980k-$1.1M price range in the position to be able to take out a conventional loan with less than 20% down. To see a map of all U.S. counties and their conforming loan limits check out the FHFA Map Tool.  

Learn More 

There are countless nuances and price range + interest rate + qualifying requirement combinations that contain great news as a result of the increased 2024 conforming loan limit. Much more than could fit into a single article. The bottom line is, if you’re in the market for a home in 2024, contact a mortgage banker to see what opportunities lie ahead.