Ready to buy now? Take advantage of the newly released 2024 maximum conventional conforming loan limit of $766,550 today! This increase of $40,350 of conventional loan financing is available to qualified buyers right now. Are you eligible to achieve the advantages of a VA loan? That works too! The new 2024 maximum also applies to VA loans and refinances.
Due to rising median home prices, the Federal Housing Finance Agency (FHFA) has increased the maximum conforming loan limit from $726,200 to $766,550. The new loan maximum loan limit for the upcoming year is typically announced by the FHFA in November. Some lenders to include Simplicity Mortgage, had already raised their conforming limits ahead of the FHFA announcement to the anticipated $750,000. The newly released loan limit actually comes in $16,550 higher than the estimated increase and allows for even larger conventional conforming loan amounts.
The conventional loan limit is a big factor when financing a home as it directly relates to real estate purchase power, aka purchase price. When the maximum loan limit increases, your maximum purchase price also increases. Right now qualified buyers, working with a participating lender, can make a home purchase up to $958,187 (with 20% down) and utilize the benefits of a conventional loan. Typically higher priced homes would require a Jumbo loan that can come with a more complex approval process and slightly higher rates.
A conventional loan limit is the maximum loan amount allowed on a conventional purchase or refinance. Also available on VA loans and refinances!
Fannie Mae and Freddie Mac are restricted by law to only purchase single-family mortgages below a specific amount, which is known as the "conforming loan limit". This limit for single-family, one-unit properties started around $33,000 back in the early 1970's and steadily increased to $417,000 in 2006. For specific high-cost areas outside the continental United States (Alaska, Hawaii, Guam and the US Virgin Islands) the maximum loan is capped at 150% of the loan limit. Over the years, the loan limit was raised in more expensive counties within the continental United States through various legislative acts, while other legislation established temporary limits for loans originated in certain time periods. A permanent formula for calculating the conforming loan limits was established in The Housing and Economic Recovery Act of 2008.
2022 is the largest dollar increase AND % increase to the loan limit on record.
Prior to 2022, 2006 had been the record holder for largest dollar increase on record. In 2006, the the loan limit jumped $57,000 - from $359,000 to $417,000, which was more than double any previous increase. In 2022, the maximum limit increased $98,950 which exceeded the 2006 figure by over $41K and was the largest % increase by 2.1%.
While the increase in median home value for 2024 may not be quite as incredible as last year - it has still increased rather significantly. The loan limit percent increase for 2024 was under 10%, which was where the percent increase had been the prior two years. 2023 was only be the third year since 2000 that the max loan amount has shown an increase over 10% from the previous year. The 2022 dollar increase in loan amount is the highest on record at $98,950.
Over the past eight years, the maximum conventional loan limit has climbed upwards - at first slowly and then accelerating quite rapidly in the prior two years, to the highest limit ever in 2024. The annual limit increase varies or remains the same depending on the economy and current home prices. Some years the increases is slight or there was no increase at all. The limit never decreases. Most notably is the timeframe from 2006 to 2016, where the maximum loan limit remained constant for 10 years straight. In 2017, the loan limit increased for the first time in 10 years, a small creep of around a 2%. From there through 2021, the percent increase was similar to the early 2000, around 7% each year. The largest percent increase & dollar increase on record happened in 2022, where the maximum loan limit increased by $98,950 which equates to a percent increase of 18%. The conventional conforming loan limits over the last 24 years are shown below in table one.
Table 1. Historical Maximum Conforming Loan Limit data from 2000 to 2023.
For the 8th year in a row, the conforming conventional loan limit will increase. Similar to last year it will be quite significant, which is not surprising based on the current economy and increased median home prices. Each year since 2008, the loan limit has been calculated based on the average home price increase from Q3 of the previous year to Q3 of the current year.
What does an increase of conventional loan limits mean for you?
The opportunity of more purchase power! The loan limit is the maximum amount you can finance while still qualifying for a conventional loan. As an example - if you put 20% down, as many do on conventional loans, you can now purchase a home with a purchase price up to $958,187. Keep in mind, first-time homebuyers may qualify to put only 3% down and previous/current homeowners may secure a conventional loan with only 5% down. This would reduce the overall purchase price a bit, but as long as the loan doesn't exceed $766,550 it can be done with a conventional loan. Another item to keep in mind is that borrowers who put less than 20% down will have to pay monthly mortgage insurance until they reach 20% loan to value (LTV).
A conforming conventional mortgage at this price point is extremely advantageous. Previous home purchases this large required a Jumbo loan, which can require a more intricate qualification process and a slightly higher interest rate.
When can I take advantage of this new conventional loan limit?
Today! These new limits are now available to qualified buyers at certain lenders to include Simplicity Mortgage.
Ready to purchase your dream home?
Call the local loan experts at Simplicity Mortgage today and we'll help you find the best loan option for your next home!
Simplicity Mortgage is located in Port Orange, Florida.
Simplicity works with borrowers looking for for real estate financing in all areas of Florida. Our service area includes Volusia and Flagler counties, Palm Coast, Ormond Beach, Ormond by the Sea, Deland, Daytona Beach, Daytona Beach Shores, Port Orange, Ponce Inlet, New Smyrna Beach, Orlando, Jacksonville, and all surrounding areas of Florida.
Our portfolio consists of more than 15 nationwide lenders, which allows us to offer a wide variety of loan products to our clients.
Our goal is to provide a smooth loan process and exceptional customer experience coupled with a low interest rate and minimal fees. We will keep you updated and informed throughout the process.
Our loan portfolio contains a variety of loan products: Conventional, VA, FHA, USDA, Jumbo, Non Qualified Mortgage (non-QM), Self Employed, 1099, first time home buyer, investment, and secondary property purchases.
Looking to stay in your home? There are plenty or money saving options for your refinance as well to include IRRRL, Home Equity Loan, Streamline Refinance, Cash Out, and Rate and Term.
Call Freddy or Tara Kling today to discuss your home purchase or mortgage refinance. We will utilize your financial information to determine future mortgage payment with available mortgage rates to help you determine the best path to achieve your financial and real estate goals.