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New Conforming Loan Limits for 2024: What You Need to Know
What Are Conforming Loan Limits?
Conforming loan limits are the maximum dollar amounts for mortgages that Fannie Mae and Freddie Mac can purchase. These limits are determined by the Federal Housing Finance Agency (FHFA) and are based on geographic guidelines and federal laws. Each year, the FHFA sets new limits that take effect on January 1st. For 2024, the baseline conforming loan limit for a single-family home is $766,550, up from $726,200 in 2023.
New Conforming Loan Limits for 2024
Due to rising home values, the conforming loan limit for 2024 has increased in all but five U.S. counties. The new baseline limit is $766,550, reflecting a 5.56% increase from the previous year. In high-cost areas, where 115% of the local median home value exceeds the baseline limit, the loan limit can go up to $1,149,825. This is particularly relevant for areas like Los Angeles, New York, and parts of Hawaii.
What Are Conforming Loans?
Conforming loans meet the standards set by the FHFA, Fannie Mae, and Freddie Mac. These loans generally offer lower interest rates and have lower credit score and income requirements compared to non-conforming loans. The limits help Fannie Mae and Freddie Mac reduce the risk of purchased mortgages.
Alternatives to Conforming Loans
If the price of the home you are interested in exceeds the conforming loan limit in your area, you might need to consider alternatives such as jumbo loans or interest-only loans. Jumbo loans typically come with higher interest rates and stricter lending requirements. Interest-only loans offer lower monthly payments initially but can become more expensive over time.
The Bottom Line
For 2024, the baseline limit for conforming loans is $766,550, up almost 6% from the previous year. Understanding these limits can help you make informed decisions during your home search. If you need assistance navigating these changes, O1ne Mortgage is here to help. Call us at 213-732-3074 for any mortgage service needs. Our team of experts is ready to guide you through the process and help you secure the best mortgage for your situation.
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