MORTGAGE
Loan Limits

Mortgage loan limits are the maximum loan amounts that lenders can offer to borrowers based on the type of loan program. These limits are established by government agencies and entities like the Federal Housing Administration (FHA), Fannie Mae, Freddie Mac, the U.S. Department of Agriculture (USDA), the U.S. Department of Veterans Affairs (VA), and for conventional mortgages, Jumbo loans. These loan limits are designed to help ensure that loans remain affordable and fit within certain risk parameters. Loan limits vary by geographic region, depending on local home prices, and they are updated annually to keep up with inflation or changes in the housing market.

The FHA loan limit is set by the Federal Housing Administration and applies to loans that are insured by the government. The FHA has a cap on the maximum loan amount, and these limits vary by county. The FHA limits are typically lower than conventional loan limits but offer lower down payments, making them accessible to first-time homebuyers and those with lower credit scores. FHA loan limits range from as low as $320,000 in low-cost areas to $1,000,000 or more in high-cost areas, such as parts of California or New York.

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that buy and securitize conventional mortgages. Both agencies have similar loan limits, which are generally higher than those of FHA loans but lower than those of Jumbo loans. The standard conforming loan limit for Fannie Mae and Freddie Mac loans in most areas of the U.S. is $726,200 in 2024, though the limit can be as high as $1,089,300 in high-cost areas. These limits are determined by the Federal Housing Finance Agency (FHFA), which adjusts them annually based on the national average home price.

The USDA offers loans specifically for rural and suburban homebuyers, with loan limits that are based on household income and the location of the home. Unlike other loan programs, USDA loans are not subject to a fixed maximum loan amount, but there are income limits that must be met for eligibility. The USDA loan program is designed to promote homeownership in rural areas, and the loan limits can vary significantly depending on the county and household size. These loans do not require a down payment, making them an attractive option for qualified buyers.

VA loans, backed by the U.S. Department of Veterans Affairs, offer special financing options for eligible veterans, active-duty service members, and certain surviving spouses. VA loans do not have a strict loan limit in the traditional sense, as they are designed to provide 100% financing for qualified borrowers. However, there are limits on how much the VA will guarantee, which can influence the loan amount that lenders are willing to offer. The VA’s loan limits are tied to the conforming loan limits set by Fannie Mae and Freddie Mac, and for 2024, the limit for high-cost areas is $1,089,300. VA loan limits are waived for veterans who make a down payment.

A reverse mortgage is a type of loan available to homeowners aged 62 or older, allowing them to convert home equity into cash. The loan limit for a reverse mortgage is determined by factors such as the homeowner’s age, the value of the home, and current interest rates. The Federal Housing Administration sets limits for Home Equity Conversion Mortgages (HECM), the most common type of reverse mortgage, which can range from $1,000,000 to over $1,000,000 in high-cost areas, depending on the home’s value and location. Jumbo reverse mortgages are available for homes valued above the HECM limit, but they are not insured by the FHA.

Jumbo loans, on the other hand, are non-conforming loans that exceed the loan limits set by Fannie Mae and Freddie Mac. Since they are not eligible for purchase by these agencies, they carry more risk and often come with higher interest rates. Jumbo loan limits vary by location and can be significantly higher than those of conventional loans, with some areas having limits up to $3 million or more. As these loans are not backed by government agencies, borrowers must typically have higher credit scores and larger down payments to qualify. Jumbo loans are often used for purchasing luxury homes or properties in high-cost areas where home prices exceed the conforming loan limits.

In 2024, the current loan limits for each of these agencies reflect both national trends and regional differences. FHA loan limits range from about $320,000 to over $1 million depending on location, Fannie Mae and Freddie Mac’s conforming limits are set at $726,200 to $1,089,300, USDA loans have flexible loan limits based on income and location, VA loans have no fixed limit but are influenced by the conforming loan limits, reverse mortgages have limits tied to the FHA’s HECM program, and Jumbo loans exceed the limits of conforming loans, often reaching into the millions depending on the market.

– Fannie Mae/Freddie Mac Loan Limits

– FHA Loan Limits

– VA Loan Limits

– USDA Loan Limits

– Reverse Mortgage Loan Limits