Published by Forbes.com | December 5, 2023
If you had your eye on a house or neighborhood in a certain price point but weren’t able to borrow enough for a loan, your luck may change in 2024.
Last week the Federal Housing Finance Agency and Federal Housing Administration announced the increases to how much buyers can borrow for loans backed by the federal government, as part of their annual requirement to keep pace with the change in house prices.
For FHFA loans the limit will increase to $766,550, a $40,350 jump over the 2023 threshold of $726,200. In areas with a higher cost of living, such as California, New York and Hawaii, the limit is set to be 150% of the baseline limit which equals $1,149,825.
Ken Fears, Director of Conventional Housing Finance and Valuation Policy, at the National Association of REALTORS, said “NAR is encouraged by the FHFA’s continuing efforts to provide liquidity in all markets. Homebuyers in high-cost markets are not immune to the affordability challenges presented by the surge in mortgage rates over the last year. Allowing Fannie Mae and Freddie Mac to support the broader market provides much needed and affordable financing for those who do not qualify for purely private options.”
For FHA loans, which often appeal to buyers with smaller down payments or lower credit scores, the limit will rise to $498,257 up from this year’s limit of $472,030. FHA loans often require only a 3% minimum down payment, but come with required private mortgage insurance as part of the loan.
