Will FHA Loan Limits Increase in 2024?
Following the release of new conforming loan limits, FHA loan limits increased from $472,030 in 2023 to $498,257 in 2024.
Each year, FHA loan limits are updated, closely following conventional loan limit changes established by the Federal Housing Finance Agency (FHFA), the overseer of Fannie Mae and Freddie Mac.
In 2024, FHA loan limits will increase in step with FHFA's decision, released November 28, 2023.
Will 2024 FHA Loan Limits Increase?
Because FHA sets limits at 65% of conventional limits, FHA loan limits for a 1-unit property in a standard area increased from $472,030 in 2023 to $498,257 in 2024.
Loan limits increased for 2-4 unit properties and homes in high-cost areas as well.
Units | FHA Standard Loan Limits 2024 | FHA High-Cost Loan Limits 2024 |
1 | $498,257 | $1,149,825 |
2 | $637,950 | $1,472,250 |
3 | $771,125 | $1,779,525 |
4 | $958,350 | $2,211,600 |
Homebuyers and homeowners in Alaska, Hawaii, Guam, and the U.S. Virgin Islands have access to even larger FHA loans.
Units | AK, HI, Guam, USVI |
1 | $1,724,725 |
2 | $2,208,375 |
3 | $2,669,275 |
4 | $3,317,400 |
Now, FHA homebuyers looking for more expensive homes can finance even more with the 3.5% down FHA loan.
The U.S. Department of Housing and Urban Development (HUD) bases FHA limits on national conventional loan limits set by FHFA.
FHFA determines conventional conforming loan limits by comparing year-over-year home price changes in the third quarter as measured by its Home Price Index.
On November 28, 2023, FHFA released 2024 conventional conforming loan limits. New conventional limits increased 5.56% from $726,200 in 2023 to $766,550 in 2024. The new loan limit was determined using the following calculation*:
= (2023 Q3 HPI – 2022 Q3 HPI) / 2022 Q3 HPI
= (392.04 – 371.4) / 371.4
= .05557 (5.56%)
About FHA Standard and High-Cost Loan Limits
Like conventional loans, FHA loans allow higher loan limits for properties in high-cost areas.
Interestingly, it matches conventional loan limits in the most expensive areas of the U.S., allowing maximum loans up to 150% of the conventional limit.
Standard areas: 65% of the conventional limit
High-cost areas: 150% of the conventional limit
HUD also maintains a list of about 350 areas in which loan limits are somewhere between standard and high-cost levels. The 2024 limits for these areas were determined on a case-by-case basis depending on home price changes in the area.
Look up your local limit by visiting HUD's website and selecting "CY2024" in the field "Limit Year."
Can FHA Loan Limits Decrease?
FHA loan limits cannot decrease even if Q3 home prices were to decline from Q3 of the previous year. In this case, FHA loan limits would remain the same.
Likewise, if a high-cost county’s home prices drop, FHA loan limits will stay the same, following the same guidelines as FHFA for conventional loans.
Should Buyers Wait Until 2024?
Most FHA lenders are offering increased loan limits immediately. There's no need to wait until 2024 to apply for a larger FHA loan.
*(Note that loan limits are based on FHFA’s expanded-data indexes, which is why the above figures differ from commonly cited HPI numbers)
Tim Lucas spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. Tim has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, and more.
