The Federal Housing Finance Agency (“FHFA”) has announced a 5.56% increase in baseline conforming loan limits and high-cost area loan limits for 2024 to reflect the rise in average U.S. home prices. These maximum loan limits will apply to single-family conventional loans purchased by Fannie Mae and Freddie Mac in 2024. Loans above these limits are known as jumbo loans.
The FHFA's House Price Index (“HPI”) report, which is a collection of housing price transaction data covering all 50 states and over 400 counties, indicates a 5.56% increase in housing prices on average between the third quarters of 2022 and 2023. This increase is reflected in the baseline conforming loan limit for 2024 which will be:
One-Unit: $766,500
Two-Unit: $981,500
Three-Unit: $1,186,350
Four-Unit: $1,149,825
Special statutory provisions apply to loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. The baseline loan limit in these areas will be:
One-Unit: $1,149,825
Two-Unit: $1,472,250
Three-Unit: $1,779,925
Four-Unit: $2,211,600
High-Cost Area Limits
Along with the changes to the general loan limits for one-unit properties, “High-Cost Areas,” or areas in which 115% of the local median home value exceeds the baseline conforming loan limit, will have a higher maximum. Under the Housing and Economic Recovery Act (“HERA”), the maximum loan limit in a high-cost area is a multiple of the median home value up to a “ceiling” equal to 150% of the baseline loan limit. The new maximum amount for a “High-Cost Area” will be:
One-Unit: $1,149,825
Two-Unit: $1,475,250
Three-Unit: $1,779,925
Four-Unit: $2,211,600
A partial list of FHFA’s published maximum loan amounts are listed below. An entire list and map of the new conforming loan limits for all states can be found here. The conforming loan limits will be higher in all but five counties or county equivalents for 2024.
Whenever there is a change in conforming loan limits, the following district and state-specific high-cost tests may be impacted: California, the District of Columbia, Georgia, Indiana, Maine, New Mexico, New York, North Carolina, South Carolina, Tennessee, and Texas. The rules governing the applicability of these high cost tests may be determined, in part, by reference to the then-current conforming loan limits. For more information about these high-cost tests and others, please see DocMagic’s State-Specific High Cost Memos here.
DocMagic’s Compliance Department will be modifying certain high cost tests (as enumerated above) to ensure that, where applicable, the appropriate conforming loan limit is selected for the district, state or county in which the mortgage property is located.
Please note that for both North Carolina and Tennessee, changes in the conforming loan limits will have no impact on its respective high-cost test.[1]
In addition to impacts to state high cost tests, the conforming loan limit will also determine which threshold applies for determining a Higher-Priced Mortgage Loan. The HPML definition at 12 C.F.R. 1026.35(a)(1) defines an HPML as a first-lien loan with an APR that exceeds 1.5% above the relevant Average Prime Offer Rate for loan amounts that do “not exceed the limit…for the maximum principal obligation eligible for purchase by Freddie Mac,” and applies a 2.5% threshold amount for first-lien loans with loan amount that do exceed the maximum principal obligation eligible for purchase by Freddie Mac.
For high-cost areas, the applicable loan limits for one-unit properties are listed below by state (or district) and by state county if applicable. Note that locations for which DocMagic’s Compliance Department will be updating its high-cost test to reference the correct “jumbo” conforming loan limit are denoted by an asterisk before the state or district.
Alaska: $1,149,825 – all counties
*California: $766,500 – all counties except the following:
$1,149,825 (Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz)
$1,017,750 (Napa) – No change
$1,006,250 (San Diego)
$954,500 (Ventura)
$929,200 (San Luis Obispo)
$920,000 (Monterey)
$877,450 (Sonoma)
$838,350 (Santa Barbara)
Colorado: $766,500 – all counties except the following:
$1,149,825 (Eagle, Garfield, Pitkin)
$1,012,000 (Routt)
$1,006,250 (Summit)
$994,750 (San Miguel)
$856,750 (Boulder) – No change
$816,500 (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, Park)
*District of Columbia: $1,149,825
Florida: $766,500 – all counties except:
$929,200 (Monroe)
*Georgia: $766,500 -all counties
Hawaii: $1,149,825 – all counties
Idaho: $766,500 – all counties except:
$1,149,825 (Teton)
Indiana: $766,500 – all counties
Maine: $766,500 – all counties
Maryland: $766,500 – all counties except:
$1,149,825 (Calvert, Charles, Frederick, Montgomery, Prince George’s)
Massachusetts: $766,500 – all counties except:
$1,149,825 (Dukes, Nantucket)
$862,500 (Essex, Middlesex, Norfolk, Plymouth, Suffolk)
New Hampshire: $766,500 – all counties except:
$862,500 (Rockingham, Strafford)
New Jersey: $766,500 – all counties except:
$1,149,825 (Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union)
New Mexico: $766,500 – all counties
*New York: $766,500 – all counties except the following:
$1,149,825 (Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester)
Pennsylvania: $766,500 – all counties except:
$1,149,825 (Pike)
South Carolina: $766,500 – all counties
Tennessee: $766,500 – all counties except the following:
$943,000 (Cannon, Cheatham, Davidson, Dickson, Macon, Maury, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, Wilson)
Texas: $766,500 – all counties
Utah: $766,500 – all counties except:
$1,149,825 (Summit, Wasatch)
$997,050 (Wayne)
Virginia: $766,500 – all counties except:
$1,149,825 (Arlington, Clarke, Culpeper, Fairfax, Fauquier, Loudoun, Madison, Prince William, Rappahannock, Spotsylvania, Stafford, Warren, Alexandria City, Fairfax City, Falls Church City, Fredericksburg City, Manassas City, Manassas Park City)
Washington: $766,500 – all counties except:
$977,500 (King, Pierce, Snohomish) – No Change
West Virginia: $766,500 – all counties except:
$1,149,825 (Jefferson)
Wyoming: $766,500 – all counties except:
$1,149,825 (Teton)
Guam: $1,149,825
American Samoa: $766,500
Northern Mariana Islands: $766,500
Puerto Rico: $766,500
U.S. Virgin Islands: $1,149,825
The new “jumbo” conforming loan limits will be implemented into the applicable DocMagic state-specific high-cost tests beginning January 1, 2024.
Please contact DocMagic’s Compliance Department if you have any questions regarding this article.
[1] The North Carolina High-Cost Home Loan Law applies to a loan if, among other things, the principal amount (or the maximum credit line in the case of an open-end loan) of the loans does not exceed the lesser of $300,000, or the Fannie Mae conforming loan limit for a single-family dwelling. The Tennessee Home Loan Protection Act applies to a loan if, among other things, the principal amount of the loan does not exceed the lesser of $350,000, or the Fannie Mae conforming loan limit of a single-family dwelling.
