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Loan Limit Update

We have exciting news in the world of mortgage loans. Rates and home prices have been increasing. To help keep up with both demand and need, the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) have decided to raise the conforming loan limit. Let’s look at what this means for buyers entering the market.

What Is the Conforming Loan Limit?

The conforming loan limit determines the amount when a loan goes from being a conventional loan to a jumbo loan. This is important because jumbo loans require larger down payments and typically have higher interest rates. Conforming loan limits also determine which loans can be sold on the secondary market to Fannie Mae or Freddie Mac.

New 2023 Conforming Loan Limits

For homebuyers looking for a single-family home in low-cost areas, which is most of the US, loan limits for a conventional loan are now up to $726,200, which is over a 10% increase from 2022. For those looking to buy in high-cost areas, the loan limits have been raised to $1,089,300. Conforming loans are also available for multi-unit homes (up to 4 units). The limits vary by the number of units.

New FHA Loan Limits for 2023

With the new conforming loan limits for 2023, we have new FHA loan limits as well. For low-cost loans, the limit is set to 65% and is higher in more expensive areas. In addition, places with higher construction costs, like Hawaii and Alaska, have special limits set by the FHA. For single-family homes in low-cost areas, the FHA will back loans up to $472,030, which is a significant increase from 2022. As with conforming loans, FHA loan limits vary by the number of units and area.

Conventional Loans vs. FHA Loans

Conventional and FHA loans differ in more than just the loan limits. FHA loans are issued by private lenders but backed by the government. This makes them less risky for banks, and so easier for people to qualify for. Conventional loans may be conforming, where they can be later sold to Freddie Mac or Fannie Mae, or non-Conforming, such as jumbo loans or other loan types.

Are You Buying a Home?

Now is an exciting time to buy, but you or your clients may still have questions about what new loan limits mean for them. Let me help you or your clients reach their dream of home ownership. Go to to schedule an appointment and talk about your or your client’s options.


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