The Federal Housing Administration usually raises FHA Loan limits for the upcoming year. Like higher Conforming Loan limits, higher FHA Loan limits help homebuyers keep up with rising housing prices. The FHFA House Price Index (HPI®) shows that home prices appreciated by nearly 6 percent over the past year.
As a result, FHA Loan limits for 2024 rose to $498,257. Though this doesn’t mean that all FHA borrowers will qualify for this loan amount—as income, credit, and other variables still apply—it does mean that more homebuyers may now be able to afford a home in their area while still using an affordable loan program like the FHA.
Larger loan limits give homebuyers the chance to take advantage of the many FHA benefits listed above when buying a home at a higher price. These include making a lower down payment.
Increased FHA limits can also give homeowners interested in a cash-out refinance access to more of their equity. FHA Loan limits may even be higher than Conventional Loan limits in some high-cost areas.
When loan limits rise, your buying power rises too. Meaning:
- If you’ve had difficulty qualifying for a Conventional Loan, you might now qualify for an FHA Loan under these new limits.
- This could give you more buying power to purchase a house in a higher price range.
Higher loan limits might open up more inventory for you. While housing inventory isn’t nearly as tight as it was during the pandemic, it’s still recovering from historically low levels. It’s possible that you may find more listings available in your home search if you qualify to borrow more with an FHA Mortgage.