In this article:
The upper dollar limit for millions of U.S. mortgages has gone up by nearly 6% in 2024.
These commonplace mortgages, known as conforming loans, meet the lending requirements of Fannie Mae and Freddie Mac. These two government-created enterprises back most mortgages in the U.S. The maximum dollar amount for loans that conform to Fannie Mae and Freddie Mac restrictions has increased for 2024—with the commonly used baseline limit landing at $766,550, up from $726,200 in 2023. Conforming loan limits are connected to home prices.
A key benefit for homebuyers: Conforming loans generally offer lower interest rates than other types of mortgages do, as well as lower credit score and income requirements.
What Are Conforming Loan Limits?
Before we dive into the details, let's be clear about what conforming loan limits are. These limits—determined by whether a home is in a low-cost or high-cost housing market—are the highest dollar amounts for mortgages that Fannie Mae and Freddie Mac can purchase. Mortgages above these limits are called jumbo loans.
Each November, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, sets conforming loan limits based on geographic guidelines and federal laws. The yearly limits take effect January 1. Increases in conforming loan limits reflect the year-to-year percentage change in the FHFA's House Price Index. The limits may rise or remain the same from year to year, but they never go down.
Fannie Mae and Freddie Mac buy mortgages from lenders and hold them as investments or package the loans into mortgage-backed securities that can be sold. Lenders sell mortgages to raise cash that supports even more lending.
New Conforming Loan Limits for 2024
Due to rising home values, the conforming loan limit for 2024 is higher in all but five U.S. counties or similar areas, says the FHFA. The limit caps the dollar amounts of mortgages that Fannie Mae and Freddie Mac can buy.
The federal agency raised the baseline conforming loan limit for a single-family home to $766,550 in 2024. That's up 5.56% from 2023, when the limit was $726,200. On a percentage basis, this hike matches the average increase in U.S. home values (5.56%) between the third quarters of 2022 and 2023.
In areas where 115% of the local median home value surpasses the baseline loan limit, the loan limit for 2024 goes beyond $766,550. In these high-cost places, such as Los Angeles and New York counties, the federal Housing and Economic Recovery Act of 2008 sets the top limit at 150% of the baseline limit. This means that for 2024, the upper limit in these areas is $1,149,825, or 150% of $766,550. The 2024 limit is 5.56% higher than the $1,089,300 limit for 2023.
Under federal law, the FHFA annually assigns different loan limits to high-cost Alaska, Hawaii, Guam and the U.S. Virgin Islands. For 2024, the baseline loan limit for single-family homes in these places is $1,149,825.
The following table shows the bottom and top conforming loan limits for 2000 to 2024 in a sampling of areas.
| Conforming Loan Limits, 2020-2024 | ||
|---|---|---|
| Year | Lowest Conforming Loan Limit for a Single-Family Home | Highest Conforming Loan Limit for a Single-Family Home |
| 2024 | $766,550 | $1,149,825 |
| 2023 | $726,200 | $1,089,300 |
| 2022 | $647,200 | $970,800 |
| 2021 | $548,250 | $822,375 |
| 2020 | $510,400 | $765,600 |
The following table features examples of areas where conforming loan limits for single-family homes are higher than in most of the rest of the U.S. Generally, these high-cost places are in major metropolitan areas or are getaway destinations.
The states with high-cost spots are Callifornia, Colorado, District of Columbia, Florida, Hawaii, Idaho, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee, Utah, Virginia, Washington, West Virginia and Wyoming.
| 2024 Conforming Loan Limits in High-Cost Areas | |
|---|---|
| High-Cost Area | Conforming Loan Limit for Single-Family Home |
| Los Angeles County, California | $1,149,825 |
| San Diego County, California | $1,006,250 |
| Summit County, Colorado (Breckenridge) | $1,006,250 |
| District of Columbia | $1,149,825 |
| Monroe County, Florida (Key West) | $929,900 |
| Honolulu County, Hawaii | $1,149,825 |
| Nantucket County, Massachusetts | $1,149,825 |
| Bergen County, New Jersey (Hackensack) | $1,149,825 |
| New York County, New York (Manhattan) | $1,149,825 |
| Westchester County, New York (White Plains) | $1,149,825 |
| Davidson County, Tennessee (Nashville) | $943,000 |
| Summit County, Utah (Park City) | $1,149,825 |
| Arlington County, Virginia | $1,149,825 |
| King County, Washington (Seattle) | $977,500 |
| Jefferson County, West Virginia (Charles Town) | $1,149,825 |
| Teton County, Wyoming (Jackson Hole) | $1,149,825 |
| Guam | $1,149,825 |
| St. Croix, U.S. Virgin Islands | $1,149,825 |
| St. John, U.S. Virgin Islands | $1,149,825 |
| St. Thomas, U.S. Virgin Islands | $1,149,825 |
What Are Conforming Loans?
Conforming loans meet standards set by the FHFA, Fannie Mae and Freddie Mac. A key part of these standards is conforming loan limits.
In addition to Fannie Mae and Freddie Mac requirements like credit scores and down payments, the FHFA establishes maximum sizes for loans that can be bought by these two enterprises. The limits help Fannie Mae and Freddie Mac reduce the risk of purchased mortgages.
Loans that exceed conforming loan limits are called jumbo loans. A jumbo loan can't be purchased by Fannie Mae and Freddie Mac, so lenders typically keep it throughout the life of the mortgage. Jumbo loans generally come with higher interest rates due to their higher risk compared with conforming loans.
The FHFA establishes conforming loan limits on a county-by-county basis. About 95% of counties qualify for the baseline loan limit on single-family homes.
Examples of Conforming Loan Limits
So, let's say you want to buy a $1 million home in high-cost Arlington County, Virginia, which is part of the Washington, D.C., metro area. Based on the county's conforming loan limit for 2024 ($1,149,825), you could qualify for a Fannie Mae- or Freddie Mac-supported mortgage.
But what about a $1 million home in Howard County, Maryland, which is part of the adjoining Baltimore metro area? There, you could not qualify for a Fannie Mae- or Freddie Mac-backed mortgage. That's because Howard County's 2024 conforming loan limit sits at the baseline ($766,550). As a result, you'd need to buy that $1 million home with a non-conforming loan.
Are Conforming Loans Also Conventional Loans?
Keep in mind that all conforming loans are conventional loans, and that most (but not all) conventional loans are conforming. Conforming loans follow Fannie Mae and Freddie Mac guidelines, while conventional loans aren't tied to government agencies like the Federal Housing Administration (FHA).
Alternatives to Conforming Loans
Before taking out a home mortgage, be sure to check the conforming loan limit in the area where you're looking for a place to live. If you discover that the price tag for the home you've picked exceeds the area's conforming loan limit, don't give up hope. Look into these alternatives:
- Jumbo loan: Because they're considered riskier loans, jumbo loans typically charge higher interest rates than conforming loans do. Furthermore, they usually demand a higher credit score and a higher income level.
- Interest-only loan: With an interest-only mortgage, comparatively lower monthly payments are earmarked for the loan's interest but not the principal. When the interest-only period ends, you must shift to higher principal-and-interest payments. Interest-only mortgages aren't easy to find. Other typical drawbacks are stiffer lending guidelines, higher-than-normal interest rates and adjustable rates.
Generally, it's best to stick to a conforming loan if you want better odds of qualifying for a mortgage and would like to pay a lower interest rate.
The Bottom Line
For 2024, the baseline limit for conforming loans is $766,550, up almost 6% from the previous year. During your home search, be sure to pay attention to the conforming loan limit for the area where you're doing your shopping. Being aware of the conforming limit could save you a lot of time and money.
No matter what type of mortgage you plan to apply for, it's important to ensure your credit is in top shape for a mortgage. Check your credit report and credit score for free from Experian, and take steps to improve your credit if necessary.