If you’ve had your eye on a home or neighborhood at a certain price but haven’t been able to borrow enough to get a loan, your luck could change in 2024. Last week, the Federal Housing Finance Agency and the Federal Housing Administration announced increases in how many buyers can borrow to get On loans backed by the federal government, as part of their annual requirements to keep up with changes in home prices.
For FHFA loans, the limit will increase to $766,550, representing a jump of $40,350 over the 2023 threshold of $726,200. In areas with a high cost of living, such as California, New York, and Hawaii, the limit is set to be 150% of the base limit which equals $1,149,825.
“The NAR is encouraged by the FHFA’s ongoing efforts to provide liquidity across all markets,” said Ken Fears, director of traditional housing finance and appraisal policy at the National Association of Realtors. “Homebuyers in high-cost markets are not immune to the affordability challenges posed by The surge in mortgage rates over the past year Allowing Fannie Mae and Freddie Mac to support the broader market provides much-needed, affordable financing to those who do not qualify for purely private options.
For FHA loans, which often appeal to buyers with smaller down payments or lower credit scores, the limit will rise to $498,257 from this year’s limit of $472,030. FHA loans often require a minimum down payment of just 3%, but come with private mortgage insurance required as part of the loan.
“Higher conforming loan limits will help more people, especially those living in high-cost areas, be able to afford a new home. Especially now when rates are still very high, but they are coming down,” said Melissa Cohn, regional vice president at William Raveis. Mortgage, conforming loans allow for lower credit scores, debt-to-income ratios up to 50%, smaller down payments, renovation loans and more.
Home prices have been rising steadily, with median home prices this fall rising between 3.4% and 3.5% over last year, according to NAR and Redfin data. The increase in mortgage interest rates has slowed price growth, but demand remains high meaning that any potential declines in average rates next year are likely to be minimal and limited to less competitive markets.
To see a full map of where different loan limits apply, head to This website is maintained by FHFA.