NEW: FHA Loan limits just increased
The amount you can borrow using an FHA Loan is going up in 2024, according to a recent announcement.
Fannie Mae and Freddie Mac have introduced higher Conforming Loan limits for 2024. Now, the Federal Housing Administration has just announced that 2024 FHA Loan limits will also increase.
FHA Loan limits will rise to $498,257, increasing by more than $26,000 and reaching 65 percent of the new Conforming Loan limit. FHA Loan limits will also rise to $1,724,725 in Hawaii and Alaska and to $1,149,825 in high-cost areas. Being able to borrow more with an FHA Mortgage can have big benefits for those who qualify.
Why choose an FHA Loan?
An FHA (Federal Housing Administration) Loan is government-backed and designed to help low- to moderate-income homebuyers become homeowners. An FHA Loan comes with a lower down payment and is a great mortgage program for those who want to apply. You can read more here about why FHA Loans are a popular choice for many first-time and repeat homebuyers.
Here are a few features of the FHA Mortgage:
- Minimum down payment: 3.5 percent
- Minimum credit score: 580
- Income limits: None (except for affordable housing programs)
- 2024 loan limits for single-family housing: $498,257
- 2024 loan limits for high-cost areas: $1,149,825
- Acceptable down payment sources: Savings, gift funds, gift of equity, or down payment assistance
One of the biggest advantages of an FHA Loan is that it doesn’t require 20 percent down. Having a lower down payment requirement helps put homeownership in reach for more homebuyers.
Every FHA Loan comes with a Mortgage Insurance Premium (MIP). Mortgage insurance protects a lender if a loan defaults. You can learn about FHA mortgage insurance here. Even with added insurance, an FHA Loan is still considered an affordable mortgage option.
Is an FHA Loan right for you?
Contact your local Academy Loan Officer.
How do you benefit from higher loan limits?
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.
Is 2024 the year you become a homeowner?
With these new loan limits, homeownership may now be possible for more homebuyers. Are you one of them? Get in touch with your local Academy Loan Officer to find out.
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. MAC2411-2180045.