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FHA loan limit increases to $498,257 in 2024

The floor FHA loan limit will rise by over $26,000 while the ceiling limit will increase by more than $60,000 in the new year

The Federal Housing Administration (FHA) is increasing the “floor” and “ceiling” FHA loan limits in 2024 to $498,257 and $1,149,825, respectively, the FHA announced Tuesday.

The new FHA loan limits apply to forward mortgages for a one-unit property and take effect on Jan. 1, according to the publication of FHA Mortgagee Letter (ML) 2023-21. In 2023, those figures were $472,030 and $1,089,300, respectively.

The new FHA loan limits mark increases of $26,227 for the floor and $60,525 for the ceiling, respectively.

FHA Commissioner Julia Gordon said that these changes in the loan limits will further empower homebuyers in a high-price environment.

“The statutory loan limit increases announced today reflect the continued rise in home prices seen throughout most of the nation in 2023,” Gordon said. “The increases to FHA’s loan limits will enable homebuyers to use FHA’s low-down-payment financing to access homeownership at a time when a lack of affordability threatens to shut well-qualified borrowers out of the market.”

While home-price appreciation slowed in 2023, it still pushed home prices higher nationally, according to the Federal Housing Finance Agency (FHFA)’s third quarter 2023 Housing Price Index (HPI) report, also published on Tuesday.

Home prices increased by an average of 5.5% between the third quarters of 2022 and 2023, according to the FHFA report. This growth rate is much lower than the rate seen during the same period last year (12.3%).

“[FHA] calculates forward mortgage limits based on the median house prices in accordance with the National Housing Act,” the FHA explained. “FHA’s Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county and are published periodically.”

As of Tuesday afternoon, individual county limits on FHA’s database are not yet updated.

The FHA national low-cost area mortgage limits are 65% of the national conforming limit of $766,550 for a one-unit property. The high-cost area mortgage limits are 150% of the national conforming limit, according to FHA.

There are some exceptions. Mortgage limits for special areas, including the states and territories of Alaska, Hawaii, Guam and the U.S. Virgin Islands account for higher construction costs. The ceiling rate for these areas is $1,724,725 for a one-unit property in 2024.

FHA also announced the national lending limit for government-backed reverse mortgages, known as the Home Equity Conversion Mortgage (HECM) program, on Tuesday. HECM loan limits were increased for the eighth consecutive year in a row to $1,149,825 in 2024.

Meanwhile, the FHFA also announced on Tuesday that conforming loan limits will increase to $766,550 in 2024.

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