If you're ready to buy a home and want a regular or government-backed mortgage, it must be within conforming loan limits. You'll need a jumbo loan for properties that exceed conforming loan limits. The Federal Housing Finance Agency (FHFA) sets the conforming loan limits yearly. In certain high-cost areas, there's a higher limit, up to the maximum limit for 150% of the baseline limit for one-unit properties. Read on to find conforming loan limits and what to consider when choosing between conforming and nonconforming loans.
What Is the Conforming Loan Limit?
A conforming loan limit is the maximum a lender will approve on a standard mortgage. Conforming loans must meet limits set by the Federal Housing Finance Agency, along with the underwriting guidelines set by Fannie Mae and Freddie Mac. These government-sponsored entities purchase conforming mortgages, bundle them and sell them on secondary markets, improving lenders' liquidity. This allows lenders to offer additional mortgages.
As of 2024, single-unit properties' maximum conforming loan limit is $766,550. In high-cost areas, the limit may be up to 150% of the total, or $1,149,825. Limits are higher for properties with multiple units. You could get a property with four units with a conforming loan of up to $1,474,400.
How Do the Conforming Loan Limits Work?
Conforming loan limits set the maximum value of a property that Fannie Mae or Freddie Mac can back. Fannie Mae and Freddie Mac are the government-sponsored entities that improve liquidity within the mortgage markets.They are legally restricted to purchasing single-family mortgages with origination balances below the conforming loan limit. Loans above this amount are known as jumbo loans.
The base conforming loan limit is $766,550. If the local median home value exceeds 115% of the baseline, the maximum loan limit for that area will be higher. Likewise, the maximum loan limit is higher for two-, three- or four-unit properties. The maximum limit for all areas is 150% of the baseline loan limit.
Conforming Loan Limits in 2024
The base conforming loan limit for 2024 by property type varies by area and is summarized in the following table:
| Area/Number of Units | Contiguous U.S. States | Alaska, Hawaii, the U.S. Virgin Islands, Guam and Puerto Rico |
| 1 | $766,550 | $1,149,825 |
| 2 | $981,500 | $1,472,250 |
| 3 | $1,186,350 | $1,779,525 |
| 4 | $1,474,400 | $2,211,600 |
Conforming Loan Limits in High-Cost Areas in 2024
In high-cost areas, the conforming loan limits are higher. The FHFA compares county median home values. These calculations are specific to metropolitan and micropolitan statistical areas and are used to determine the local area loan limit.
In Seattle, Los Angeles, New York and many other high-cost areas, the maximum loan limit increases to 150% of the maximum loan value. This is determined by county or micro-area. In California, for example, 10 counties have a higher maximum conforming loan limit, while only one county in Idaho and three in Colorado have higher maximum loan limits.
In California, if you want to buy a $900,000 home in Kern County, you'd need a jumbo loan because it exceeds the conforming loan limit. On the other hand, if you plan to buy in Marin County, a $900,000 home would qualify for a conforming loan.
Maximum conforming loans in 2024 are:
| Number of Units | Contiguous U.S. |
| 1 | $1,149,825 |
| 2 | $1,472,250 |
| 3 | $1,779,525 |
| 4 | $2,211,600 |
Conforming Loans vs. Nonconforming Loans: What’s the Difference?
A conforming loan is a mortgage that meets compliance requirements and financial limits set by the Federal Housing Finance Agency (FHFA). Conforming loans must adhere to Freddie Mac and Fannie Mae's funding guidelines. This limits the borrowers that qualify for a loan based on criteria from financial limits to other limits related to employment, total debt, income or credit score.
In contrast, a nonconforming loan does not need to comply with parameters from the FHFA. Instead, each lender sets its lending requirements and limits. You will need a nonconforming loan if the property you want to buy exceeds conforming loan limits. You may also need a non-conforming loan if you don't meet conforming loan criteria for employment, for example, if you're self-employed.
What Should You Consider Before Borrowing More Than the Conforming Loan Limit?
When you borrow more than the conforming loan limit, you must get a nonconforming loan called a jumbo loan. There are other nonconforming loans, such as bank statement loans or loans for self-employed individuals. Nonconforming loans may have higher interest rates because they are considered higher-risk loans.
Things to consider when borrowing more than the conforming loan limit include:
- Can you comfortably afford the higher monthly mortgage payments?
- How much are you willing to spend in total interest?
- Is your area eligible for higher maximum limits on conforming loans?
- Can you qualify for a jumbo loan?
- Do you have an alternative to make up the difference between the conforming loan limit and the home price in cash?
For many buyers, the answers to these questions may send them looking for homes in areas where average prices are lower or where they can get a home within their budget. Of course, you can also consider loans backed by the U.S. Department of Agriculture (USDA), Veterans Affairs (VA) or the Federal Housing Authority (FHA), but the maximum limits are comparable to conforming loans.
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Should You Get a Conforming Loan?
Conforming loans are the most common loans available on the market today. They offer favorable terms, lower interest rates and ease of comparison. You can easily compare many lender's offering both online and at local banks to find the best available terms. Be sure to carefully compare offers to find the mortgage options with the lowest interest rate and total fees. You can also compare USDA vs. conventional loans or even whether you need a personal loan vs. a mortgage.
Frequently Asked Questions
How often are conforming loan limits updated?
Conforming loan limits are updated annually. Every November, the FHA updates maximum conforming loan limits.
Do conforming loan limits apply to all types of mortgages?
No, not all mortgages must meet conforming loan limits. These only apply to conventional loans. Government-backed loans like FHA, VA and USDA loans have separate rules and limits.
How do conforming loan limits affect interest rates?
Conforming loans typically have lower interest rates than nonconforming mortgages, although they may be higher than government-backed mortgages. Conforming loans also improve the wider mortgage market liquidity, potentially lowering interest rates for all applicants.
About Alison Plaut
Alison Plaut is a personal finance and investing writer with a sustainable MBA, passionate about helping people learn more about wealth building and responsible debt for financial freedom. She has more than 17 years of writing experience, focused on real estate and mortgages, business, personal finance, and investing. Her work has been published in The Motley Fool, MoneyLion, and she regularly contributes to Benzinga.