Conforming Loan Limits 2023 for Texas Homebuyers

Buying a home in Texas? As a prospective homebuyer, it’s important to understand conforming loan limits when getting a mortgage. These limits establish the maximum loan amount that government-sponsored enterprises like Fannie Mae and Freddie Mac can buy or guarantee. Exceeding the limits means you’ll need a jumbo loan with usually higher rates and stricter requirements.

For 2023 most conforming loan limits in Texas have increased from 2022 thanks to rising home values. Let’s take a closer look at what these new limits mean for Texas homebuyers this year.

Overview of Conforming Loan Limits

First, what are conforming loans? These are mortgages that conform to guidelines set by Fannie Mae and Freddie Mac. As government-sponsored enterprises, Fannie and Freddie have limits on the loan amounts they can guarantee.

Conforming loans have loan limits that typically change annually. The limits differ by number of housing units, county, and whether an area is designated high-cost. High-cost areas like major cities have higher conforming loan limits to reflect their expensive housing markets.

Exceeding the conforming loan limits means getting a jumbo loan. Jumbo loans often have higher interest rates, larger down payments, and stricter credit requirements. That’s why it’s helpful to know the conforming loan limits for your local housing market.

Conforming Loan Limits for Texas in 2023

For 2023, the baseline conforming limit for a single-family home (1-unit) in Texas is $726,200. This applies to most counties in the state. However, several metro areas in Texas are considered high-cost and qualify for higher limits.

Here are the current high-cost counties in Texas and their 1-unit conforming loan limits for 2023:

• Austin-Round Rock MSA – $726,200
• Dallas-Fort Worth-Arlington MSA – $726,200
• Houston-The Woodlands-Sugar Land MSA – $726,200

The highest conforming loan limit for Texas is $1,089,300, applying to just one high-cost county:

• Fort Bend County (part of Houston metro)

So if you’re buying a single-family home or condo in Fort Bend County, the conforming limit is over $1 million. That’s significantly higher than the baseline for most of the state.

Check this conforming loan limit lookup tool to find the exact limit for any county in Texas.

Conforming Loan Limit Changes in Texas for 2023

In 2022, the baseline conforming limit for Texas was $647,200. So the new limit of $726,200 for 2023 is a 12.2% increase. This jump reflects the rapid appreciation in Texas home values last year.

The high-cost county limits have also risen. For example, the conforming limit for the Houston metro counties increased around 10% from its 2022 value.

However, one notable change is Galveston County losing its high-cost designation. Last year, Galveston had a conforming limit of $970,800. For 2023, it reverts to the statewide baseline of $726,200.

So if you’re buying in Galveston, be aware that you now have a lower conforming loan limit than 2022. Plan your purchase price and mortgage amount accordingly.

Strategies for Conforming Loan Limits

As a buyer, make sure you know the 2023 conforming loan limits relevant to your Texas home purchase. Here are some tips:

• Verify the limit for the specific county where you’re buying. Don’t assume your metro area has one universal limit.

• If choosing between two similar homes, pick the one in the county with the higher conforming limit. This gives you more buying power.

• If your loan amount exceeds the 2023 limit, explore FHA, VA, USDA loans or jumbos. Compare costs and terms to make the right decision.

• If getting a jumbo, look for lenders that offer better rates and terms for loans just above the conforming limits. Ask about “jumbo conforming” mortgages.

• To avoid jumbos, put down a larger down payment to keep your loan under the applicable conforming limit.

Monitor the housing market as you shop. Rising prices and demand could potentially push more counties into high-cost status with future limit increases.

The Bottom Line

Most homebuyers want to stay under their area’s conforming loan limit if possible. Doing so means better loan terms and more financing options. As a Texas buyer, review the updated 2023 limits early in your home search process. Knowing the limits gives you maximum flexibility and buying power.