Nov 28 2023

Take advantage of higher Conforming Loan limits


The FHFA has raised 2024 Conforming Loan limits by more than 5%, to a maximum of $766,550.

Higher loan limits are one thing to look forward to in the year ahead. The Federal Housing Finance Agency’s (FHFA) Conforming Loan limits have increased by 5.56 percent—from $726,200 to $766,550—for one-unit properties in most parts of the U.S.

Conforming Loan limits may be even higher in some high-cost states, up to $1,149,825 in Hawaii and Alaska. Purchase, rate-and-term refinance, and cash-out refinance are all permitted under these new limits. 

Why the increase? Each year, loan limits typically rise in response to housing market growth, ensuring that homebuyers continue to have access to affordable mortgage products. The FHFA usually updates its monetary Conforming Loan limits based on the results of its House Price Index (HPI) report, which reflects how much annual home prices have appreciated.

Higher Conforming Loan limits give homebuyers purchasing in this price range the opportunity to qualify for a Conforming Loan instead of a Jumbo. A Conforming Loan typically comes with a lower rate and a smaller down payment.

Here’s what to know about higher Conforming limits

With this change, a buyer considering a $766,550 property could still be eligible for a Conforming Loan, which may have a more competitive rate and less restrictive guidelines than a Jumbo Loan.

When a loan is Conforming, it meets GSE (Government Sponsored Enterprise) lending guidelines set in place by Fannie Mae and Freddie Mac. A Non-Conforming Loan, like a Jumbo Loan, doesn’t conform to Fannie Mae/Freddie Mac guidelines and may have more stringent qualification and down payment requirements. All home loans fall into one of these two categories.

A Conforming Loan is often used interchangeably with a Conventional Loan. While they’re not one and the same, there are many similarities between the two. All Conforming Mortgages are Conventional, but not all Conventional Mortgages are categorized as Conforming. Your Loan Officer can explain the subtle differences.

Use our Loan Decision Tool to find out which loan is right for you.

So, what does this mean if you’re a homebuyer?

  • Your purchasing power could increase. When loan limits rise, your buying power does too. Higher Conforming Loan limits allow you to borrow more without crossing over into Jumbo Loan territory. Jumbo Loans can come with more restrictions, higher down payments, and even higher interest rates.
  • You could now buy in a higher-cost area. Sometimes, homebuyers find that Conforming Loan limits aren’t high enough to compete in pricier parts of the country. This is the reason that limits have once again increased. You may now have more listings to choose from that are on par with the typically priced houses in your area.
  • You may need less cash to close. Your down payment makes up a significant portion of your cash to close, along with closing costs, taxes, and other fees and charges. With the new Conforming Loan limits, a down payment may be much lower than when borrowing with a Jumbo Loan. This could free up extra funds for other important things, like moving and furnishing your new house.

Remember: Larger limits help homeowners and homebuyers. When limits increase, it enables homebuyers to stay in step with rising housing prices. The potential for a lower down payment at a higher price point may make the market more affordable to more buyers. Homeowners interested in a cash-out refinance may also have access to more funds, based on their current equity levels and up to the amount of the new loan limits.

Could higher limits make it easier to buy a house?

Or would another loan program provide you with more savings? At Academy Mortgage, we take an individualized approach to homeownership; there are no cookie-cutter solutions. Contact your local Academy Loan Officer to find out which loan may offer you the most benefits.

All mortgage products are subject to credit and property approval. Rates, program terms, and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Additional conditions, qualifications, and restrictions may apply. Please contact Academy Mortgage for more information. MAC2410-2179411.