Conforming loan limits just got a boost for 2024, making it easier for home buyers to qualify for a loan.
The back story: The Federal Housing Finance Agency (FHFA) is responsible for reviewing average home prices across the country on a year-over-year basis and then adjusting conforming loan limits if appropriate. Although values have been falling due to higher interest rates since the middle of 2022, they still rose in 2022 from 2021. This prompted the FHFA to increase the conforming limits for 2023—and now, for 2024, according to long-time mortgage advisor Gordon Friedman at Guarantee Mortgage.
Why this matters: Lender underwriting guidelines for conforming loans are much more flexible than that of jumbo loans (loan amounts above official conforming limits). Higher conforming loan limits mean more buyers can qualify for a home who couldn’t under the stricter jumbo guidelines.
Conforming close-up: There are traditional and high-balance conforming loans. The Bay Area is a high-cost area, so folks purchasing houses, condos (one-unit properties) and two- to four units in San Francisco can take advantage of the high-balance conforming limits. The conforming loan amount for house and condo buyers in San Francisco and The Bay Area has increased by 5.5% from $1,089,300 in 2023 to $1,149,825 in 2024.
Here’s a look at how this all shakes out for the amounts you can borrow, courtesy of Gordon at Guarantee (click to enlarge):
The 2024 limits are in effect now, so keep it in mind if you’re planning to start a property search soon. Give me a shout at email@example.com | 415.823.4656 if you’d like to strategize and set up a plan for a successful purchase.