In response to escalating home prices in 2023, the Federal Housing Finance Agency (FHFA) has announced a 5.5% increase to the baseline (conventional) conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac in 2024.
As of 1 January 2024, the base conforming loan limit will increase by $40,350 to $766,550 for single-family homes and one-unit properties for all but five counties nationwide.
The new ceiling loan limit in high-cost areas, which is calculated at 150% of the base loan limit, will be $1,149,825 for one-unit properties located in specific counties in California, Colorado, District of Columbia, Florida, Idaho, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee, Utah, Virginia, Washington, West Virginia, and Wyoming.
The baseline loan limit for one-unit properties purchased in Alaska, Hawaii, Guam, and the U.S. Virgin Islands will also be $1,149,825.
2024 Conforming Loan Limits for Multi-Unit Properties
- Two-unit homes: $981,500 (baseline); $1,472,250 (high-cost markets)
- Three-unit homes: $1,186,350 (baseline); $1,779,525 (high-cost markets)
- Four-unit properties: $1,474,400 (baseline); $2,211,600 (high-cost markets)
The increased baseline loan limits may make it easier for first-time homebuyers to qualify for a mortgage with a mimimum down payment of 3.5%. Homeowners can also purchase a new home or refinance their existing mortgage up to this new loan limit.
To purchase a home above the limit for your county, will require a “non-conforming” mortgage, commonly referred to as a jumbo mortgage, which typically has higher interest rates.
Click here to see the 2024 conforming loan limit for your county.
Who are Fannie Mae and Freddie Mac?
Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are government-sponsored enterprises. Collectively, these entities purchase roughly half of all U.S. mortgages annually from lenders, repackaging them into mortgage-backed securities for sale to investors on the secondary mortgage market. This practice renders loans more secure and affordable for lenders, ensuring accessible credit and relatively affordable mortgage options for consumers.
How does the FHFA determine the conforming loan limit?
The conforming loan limits for loans backed by Fannie Mae and Freddie Mac are governed by the Housing and Economic Recovery Act of 2008, which set the baseline loan limit at $417,000. Subsequent legislation mandated that, following a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. The FHFA’s increase in 2024 marks the eighth consecutive year of rising limits.
The Act also set a maximum loan limit in high-cost counties where the local median home value surpasses 115% of the baseline conforming loan limit, setting that limit at 150% of the baseline loan limit.
