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- In 2023, you can borrow up to $726,200 for a conforming loan. The ceiling limit for high-cost areas is $1,089,300.
- In 2024, you'll be able to borrow up to $766,550 in most parts of the US, with a limit of $1,149,825 in more expensive areas.
- To borrow more than the FHFA allows for conforming loans, consider applying for a jumbo loan.
Each year, the Federal Housing Finance Agency (FHFA) adjusts the amount you can borrow with a conforming loan, which is probably what you think of as a "regular mortgage."
In most areas, if the loan amount you need for a home exceeds the conforming loan limit, you'll need to get a jumbo loan. However, in high-cost areas, you'll have a higher loan limit. This higher loan limit is based on the area's median home values, and may go up to the maximum "ceiling" limit for one-unit properties, which is equal to 150% of the baseline limit.
What is the conforming loan limit for 2023?
The conforming loan limit for 2023 is $726,200 in most parts of the US, a $79,000 increase from the previous year's baseline limit.
In high-cost areas, conforming loan limits may go up to a maximum of $1,089,300. This is the first time the conforming loan limit ceiling has risen above $1 million. If you live in a high-cost area, you can use the county-by-county guide on the FHFA website to see what the limit is in your city.
In Alaska, Hawaii, Guam, and the US Virgin Islands, the baseline conforming loan limit is $1,089,300.
These are the borrowing limits for single-unit homes, but you can borrow more for two-unit, three-unit, and four-unit homes.
What is the conforming loan limit for 2024?
Next year, the conforming loan limit will be higher. In 2024, you can borrow up to $766,550 on a conforming loan in most areas, a $40,350 increase from this year's limit.
In high-cost areas, the new ceiling loan limit for one-unit properties will be $1,149,825. This is also the new baseline loan limit in Alaska, Hawaii, Guam, and the US Virgin Islands.
If you're wondering if your city has a higher loan limit due to it being a high-cost area, you can check the county-level list on the FHFA's website.
What to do if you don't qualify for a conforming loan
If you want to borrow more than the FHFA allows, a jumbo loan may be an option. Jumbo loans are simply mortgages for people who need more than the FHFA normally allows. They typically have stricter eligibility requirements to qualify for a mortgage and higher interest rates than conforming loans. Jumbo loans are riskier for lenders, so companies make it harder to qualify to decrease the likelihood of a borrower defaulting on payments.
Each mortgage lender has its own requirements for jumbo loans, but you'll probably need a higher credit score, lower debt-to-income ratio, and bigger down payment than you would for a conforming loan. Expect to need at least a 700 credit score and 20% or more for a down payment. You also may need a debt-to-income (DTI) ratio of 36% to 45%.
The better your credit score, DTI ratio, and down payment, the more you may be approved to borrow with a jumbo loan.
What if your credit and debt profiles aren't strong enough for a conforming or jumbo loan? You may want to apply for an FHA mortgage, which is for people with credit scores as low as 580 and a DTI ratio of 43% or lower. The borrowing limit depends on where you live, and you can find the limit for your county here.
You may qualify for a VA mortgage if you're a military member, or a USDA mortgage if you're buying in a rural area. Neither of these types of home loans requires a down payment. VA mortgages do not have a borrowing limit, and USDA mortgages usually have the same limits as conforming loans.
