Fannie Mae and Freddie Mac are restricted by law to purchasing single-family mortgages with origination balances below a specific amount, known as the “conforming loan limit” (CLL) value. Loans above this amount are known as jumbo loans.
The national conforming loan limit value for mortgages that finance single-family one-unit properties increased from $33,000 in the early 1970s to $417,000 for 2006-2008, with limit values 50 percent higher for four statutorily-designated high cost areas: Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Since 2008, various legislative acts increased the conforming loan limit values in certain high-cost areas in the United States. While some of the legislative initiatives established temporary limit values for loans originated in select time periods, a permanent formula was established under the Housing and Economic Recovery Act of 2008 (HERA). The 2024 conforming loan limit values have been set under the HERA formula.
Fannie Mae recently announced higher conforming loan limits for 2023, bringing welcome news for homebuyers looking to finance larger loans. The Federal Housing Finance Agency (FHFA) adjusts the limits annually based on changes in median home prices. Let’s take a closer look at what this means for buyers and homeowners looking to refinance in the new year.
What Are Conforming Loan Limits?
Conforming loans are mortgages that meet the funding requirements to be purchased by Fannie Mae and Freddie Mac The FHFA sets maximum loan limits each year for loans to be considered “conforming” Loans above the limits are called “jumbo loans” and come with stricter eligibility requirements,
The baseline conforming limit applies to most of the country. Areas with higher home prices have a higher limit. For 2023 the baseline conforming limit for a single-family home is increasing from $647200 to $726,200.
Why Increase the Limits?
The FHFA adjusts the conforming loan limits each year based on changes in home prices nationwide. As home values rise, conforming loan limits increase to provide low-down-payment financing options to more buyers. The 2023 limits are rising to reflect the rapid appreciation in prices over the past year.
What Areas Saw the Biggest Increases?
The largest limit increases are generally in high-cost real estate markets like California, New York, Boston, and Washington DC. For example, the conforming limit in Los Angeles County is increasing by $103,000 to $1,089,300. The limit in San Francisco is rising to $1,235,000.
Most counties across the country saw increases between 5-15%. Only 8 counties will keep the 2022 limits due to slower home price growth. The highest limits apply to Alaska, Hawaii, Guam, and the Virgin Islands.
How Do Higher Limits Help Homebuyers?
The increased conforming loan limits allow buyers to finance larger mortgages while still qualifying for low down payment programs backed by Fannie Mae and Freddie Mac. This includes options like 3% down payment conventional loans.
Buyers can now finance more expensive homes as primary residences or second homes while taking advantage of conforming loan benefits:
- Lower interest rates than jumbo loans
- Lower down payments
- Lower mortgage insurance rates
- More flexible credit requirements
- Easier to qualify for refinancing
For those purchasing homes at the top of their budget, the new limits provide extra breathing room. Buyers who were bumping up against the 2022 limits can now finance higher purchase prices without needing jumbo loans.
When Do the New Limits Take Effect?
The new conforming loan limits apply to any loans delivered to Fannie Mae or Freddie Mac on or after January 1, 2023. This means buyers can immediately take advantage of the new higher limits when applying for mortgage financing in the new year.
Loans already in process can be adjusted to reflect the new limits if not yet delivered to the GSEs. Refinances can also benefit as homeowners can now qualify for conventional financing on higher loan amounts.
Locating the Limits in Your Area
Fannie Mae provides an online lookup tool to find conforming loan limits by county, ZIP code, or property address across the country. You can access it here:
The FHFA also publishes complete tables showing the 2023 limits for all U.S. counties and metropolitan areas. See the full details at:
https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx
The Bottom Line
The increased conforming loan limits offer more choice and purchasing power for buyers in 2023. Taking advantage of low down payment conventional financing can help first-time homebuyers overcome affordability barriers in today’s rising rate environment. For homeowners, higher refinance limits provide options to lower monthly payments.
As always, work with a trusted lender or loan officer to run the numbers and see if you qualify for conforming loan financing up to the new 2023 limits in your county. With strategic planning, you can maximize the benefits and potentially save thousands over the life of your mortgage loan.
2024 Conforming Loan Limit Values
Conforming Loan Limit Values for Calendar Year 2024 — All Counties
Fannie Mae Changes Down Payment Requirement for Multifamily Real Estate
FAQ
What are the Fannie Mae loan limits for 2023?
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B
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12
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FHFA Loan Limits Web Page
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13
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14
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The 2024 baseline loan limit is $766,550**
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15
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This is a 5.56% increase over the 2023 baseline limit of $726,200
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What is the new limit for Fannie Mae 2024?
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Units
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Contiguous States, District of Columbia, and Puerto Rico
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Alaska, Guam, Hawaii, and the U.S. Virgin Islands
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1
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$766,550
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$1,149,825
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2
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$981,500
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$1,472,250
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3
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$1,186,350
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$1,779,525
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4
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$1,474,400
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$2,211,600
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What is the Freddie loan limit for 2023?
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Number of Units
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Maximum baseline conforming loan limit values for properties NOT in Alaska, Hawaii, Guam and U.S. Virgin Islands
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2024
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2023
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1
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$766,550
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$726,200
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2
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$981,500
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$929,850
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3
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$1,186,350
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$1,123,900
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What is the loan limit for Gnma 2023?
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GNMA High Balance Threshold (Net of any Guaranty Fee)
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Units
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2024
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2023
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1
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$766,550
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$1,089,300
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2
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$981,550
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$1,394,775
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3
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$1,186,350
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$1,685,850
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What is a conforming loan limit value (CLL) in 2023?
The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022. National Baseline
What is the conforming loan limit for 2023?
As a result, the baseline conforming loan limit for 2023 will be $726,200, up $79,000 from this year’s limit of $647,200. Higher-cost areas will have a new loan limit of $1,089,300, or up to 150% of the baseline loan limit. This year, the loan limit for high cost areas is $970,800.
What are Fannie Mae loan limits in 2022-06?
Fannie Mae addresses the limits in Lender Letter 2022-06. As was expected based on the significant increase in housing prices during 2022, the limits increased substantially. The standard loan limit for a one-unit home increased from $647,200 in 2022 to $726,200 for 2023.
Are Fannie Mae loan limit values increasing in 2023?
Fannie Mae loan limit values are increasing in 2023. The new loan limit for most of the country will be $726,200 — an 12.21% increase over the 2022 limit — and is effective for whole loans delivered to Fannie Mae and loans in MBS pools with issue dates on or after Jan. 1, 2023. Fannie Mae loan limit values are increasing in 2023.