Will FHA Loan Limits Increase in 2024? (2024)

FAQs

Will FHA Loan Limits Increase in 2024? ›

The national conforming loan limit for 2024 for a one-unit property is $766,550. FHA's 2024 minimum national loan limit floor of $498,257 for a one-unit property is set at 65 percent of the national conforming loan limit.

The Federal Housing Finance Agency (FHFA) has raised the 2024 conforming loan limits for Fannie Mae and Freddie Mac to $766,550 in most of the U.S. This is a substantial increase compared to 2020s conforming loan limit set at $510,400.

FHA Mortgage Rate Predictions for 2024

Business Insider repeats the Fannie Mae prediction for 2024 that rates may reside between 6.4% and 7.1% for 30-year fixed-rate conventional mortgages. The National Association of Realtors takes a less conservative approach, predicting rates could fall as low as 6.1% in 2024.

FHA also increased the loan limits for its Home Equity Conversion Mortgage (HECM), or reverse mortgage program, to $1,149,825 effective Jan. 1, 2024. The HECM program regulations do not allow loan limits to vary by MSA or county, so this limit applies to all mortgages regardless of location.

FHA mortgage limits are closely tied to conforming loan limits. Every year, the Federal Housing Finance Agency (FHFA) updates its home price index. This is used to set both conforming loan limits and FHA loan limits.

FHA guidelines call for borrowers to have a DTI ratio of 43% or less. They also indicate that a mortgage payment should not exceed 31% of a person's gross effective income. However, as with credit scores, lenders have some discretion here.

FHA Credit Requirements for 2024

FHA Loan applicants must have a minimum FICO® score of 580 to qualify for the low down payment advantage which is currently at 3.5%. If your credit score is below 580, the down payment requirement is 10%.

The mortgage rate forecast for 2024 is that rates are expected to go down, although it may take longer than had previously been hoped. In June 2024, we're seeing a mixed picture with the best mortgage rates on fixed rate mortgages; some are nudging up while others are being trimmed.

The FHA upfront funding fee is 1.75% and it can be rolled into the loan amount. The FHA annual mortgage insurance premium is part of the monthly mortgage payment.

At what age is a reverse mortgage a good idea? ›

Reverse mortgages were meant to help seniors in or nearing retirement. Because of this, the reverse mortgage age requirement is 62 or older. You must be at least 62 years old to get a reverse mortgage.

This is known as the 60% rule, which limits the homeowner to accessing 60% of the initial Principal Limit (the amount that you can borrow), or 10% above the mandatory obligations (a combination of mortgage balances/ liens and closing costs).

The borrower cannot outlive a reverse mortgage. Implications that a reverse mortgage is not a loan, but instead a government benefit or entitlement.

The FHA loan limits for 2024 allow homebuyers to borrow up to $498,257 for a single-family home in most parts of the country. Those purchasing a home in an area designated as “high-cost” may be able to borrow up to $1,149,825.

The FHA approves loan amounts based on several factors, such as your monthly income and expenses, credit score, interest rate, the loan term and the value of the property. The maximum FHA loan in most areas of the country for a single-family home is currently $420,680 for 2022.

FHA loans do NOT have the same type of income limitation that USDA loans have. Simply put, you can't make “too much” or have “too high” of an income. You have to make enough to qualify of course, but there is no such thing as making too much for an FHA Loan.

Home-price growth increased in February 2024 by 6.4 percent, according to S&P CoreLogic's latest Case-Shiller Index. That's up from 6 percent in January. Bankrate's latest national survey of large lenders shows the average rate on a 30-year mortgage was 7.23 percent as of May 8, 2024.

Upfront Mortgage Insurance Premium (UFMIP) = 1.75% of the loan amount for current FHA loans and refinances. Annual Mortgage Insurance Premium (MIP) = 0.55% of the loan amount for most FHA loans and refinances.

For 2024, the upper limit is $766,550 to $1,149,825, depending on location. Jumbo loans are mortgages that exceed these limits in their respective counties.

Effective January 1, 2024 FHA Max loan limit in Maricopa County, Arizona is $530,150 (for single family 1 unit homes). This is up from FHA's 2022 cap of $441,600 however the amount remained the same as 2023. FHA Max Loan limits remained the same again for Maricopa County Arizona.