2024 Conforming Loan Limits

How much can you borrow to buy a home in 2024? Mortgage loan limits update annually based on changes in the housing market. As prices for the average home increase, loan limits will follow suit. Here, we break down the current limits for conventional, FHA, and VA and what your maximum home price would be based on standard down payments (3%, 5%, 10%, & 20%).

2024 Conventional loan limit: $766,550

20% down: $958,158 max sales price

10% down: $851,722 max sales price

5% down: $806,895 max sales price

3% down: $790,258 max sales price

2024 FHA loan limit: $557,750

*for the 5-county area of Bucks County, Chester County, Montgomery County, Delaware County, & Philadelphia County

20% down: $669,300 max sales price

10% down: $613,525 max sales price

3.5% down: $577,980 max sales price

2024 VA loan limit: $766,550

VA loans permit zero down!

VA Jumbo loan limit: $3 million still with zero down

We covered primarily conforming mortgage loans above. A conforming loan is the most common type of mortgage loan for a typical homebuyer. It meets the guidelines set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac. These guidelines include criteria such as loan amount, borrower’s creditworthiness, and the loan-to-value ratio. What happens if you need to borrow more than the conforming loan limit? You would look at a jumbo loan. A jumbo loan is a mortgage loan that exceeds the conforming loan limit. Jumbo loans are often used by homebuyers purchasing high-value properties in expensive real estate markets or those looking to finance luxury homes. They provide borrowers with the opportunity to finance properties that exceed the limits of conforming loans, but they also come with stricter qualification requirements and higher costs.
Choosing between a conforming loan and a jumbo loan depends on various factors including your financial situation, the cost of the property you’re interested in purchasing, and your long-term financial goals. Here are some reasons why you might choose a conforming loan over a jumbo loan:

1. Loan Limits: Conforming loans adhere to specific loan limits set by the Federal Housing Finance Agency (FHFA), which are adjusted annually based on changes in housing prices. If the cost of the property you’re interested in falls within the conforming loan limits in your area, opting for a conforming loan may be more advantageous as it typically comes with lower interest rates and more favorable terms.
2. Lower Interest Rates: Conforming loans often come with lower interest rates compared to jumbo loans. This is because conforming loans are considered less risky for lenders as they conform to the guidelines set by government-sponsored enterprises like Fannie Mae and Freddie Mac.
3. Easier Qualification: Conforming loans typically have more lenient qualification requirements compared to jumbo loans. This means that borrowers may find it easier to qualify for a conforming loan in terms of credit score, debt-to-income ratio, and other factors.
4. Availability of Mortgage Products: Conforming loans offer a variety of mortgage products including fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-insured loans like FHA and VA loans. These options provide borrowers with flexibility to choose a loan product that best fits their needs.
5. Lower Down Payment Options: Conforming loans often offer lower down payment options compared to jumbo loans. Some conforming loans allow borrowers to put down as little as 3% of the home’s purchase price, making homeownership more accessible to a broader range of borrowers.

In contrast, you might choose a jumbo loan if the property you’re interested in exceeds the conforming loan limits in your area, or if you prefer a specific type of mortgage product or terms that are only available with jumbo loans. Additionally, if you have a strong financial profile and can afford the higher down payment and stricter qualification requirements associated with jumbo loans, it may be a viable option for you.

Ultimately, it’s important to carefully evaluate your financial situation and long-term goals when deciding between a conforming loan and a jumbo loan, and to consult with a mortgage professional to explore your options.

Have questions? We’re here to answer them! Email us at info@phillymb.com or give us a call at 484-416-4280 to explore your options and how to use these loan limits to your advantage.