Conforming Loan Limits: FHFA Annual Limits by County
Conforming loan limits define the maximum mortgage balance that government-sponsored enterprises Fannie Mae and Freddie Mac are permitted to purchase or guarantee, establishing a boundary between conventional conforming loans and the larger jumbo loans that must be financed outside the secondary market. The Federal Housing Finance Agency sets these limits annually under the Housing and Economic Recovery Act of 2008 (HERA), adjusting them to reflect changes in average home prices nationwide. Limits vary by county and by unit count, meaning a duplex in a high-cost metropolitan area carries a substantially different ceiling than a single-family home in a lower-cost rural county. Understanding where a specific loan falls relative to these limits directly affects the interest rate, down payment requirements, and available lender pool for a given transaction.
Definition and scope
The conforming loan limit is the statutory dollar ceiling below which a mortgage qualifies for purchase by Fannie Mae and Freddie Mac, the two federally chartered enterprises that form the backbone of the secondary mortgage market. The FHFA, established under 12 U.S.C. § 4511 and tasked with regulating the enterprises under the Housing and Economic Recovery Act of 2008 (HERA, Pub. L. 110-289), recalculates limits each November using the House Price Index (HPI) it publishes. If the HPI shows that average home values rose compared to the prior year, the baseline limit increases proportionally.
For 2024, the FHFA set the baseline conforming loan limit for a one-unit property at $766,550 (FHFA 2024 Conforming Loan Limit announcement). High-cost areas, defined as counties where 115 percent of the local median home value exceeds the baseline, receive a higher ceiling up to $1,149,825 for one-unit properties in 2024 — exactly 150 percent of the baseline. Alaska, Hawaii, Guam, and the U.S. Virgin Islands receive the high-cost ceiling by statute regardless of local HPI, a designation codified in 12 U.S.C. § 1717(b)(2).
Scope extends beyond single-family residences. Limits scale upward by unit count: 2-unit, 3-unit, and 4-unit properties each carry their own baseline and high-cost ceilings, with the 4-unit baseline reaching $1,472,550 nationally for 2024 (FHFA Loan Limit Values).
How it works
The annual recalculation process follows a defined sequence:
- HPI measurement — The FHFA measures the percentage change in average home prices using its House Price Index, which aggregates repeat-sale mortgage data from Fannie Mae and Freddie Mac's portfolios.
- Baseline adjustment — If the HPI reflects a net price increase, the baseline limit rises by the same percentage. If prices fell, HERA's "floor" provision prevents the limit from dropping below the prior year's value.
- County-level mapping — FHFA determines each county's median home value. Counties where 115 percent of the median exceeds the new baseline are classified as high-cost areas and receive a pro-rated limit up to the statutory ceiling.
- Publication and adoption — FHFA publishes the county-by-county table, typically in late November. Fannie Mae and Freddie Mac update their Selling Guides to reflect the new limits effective January 1 of the following year.
- Lender implementation — Lenders reconfigure loan origination systems to apply the correct county limit at the point of underwriting. Loans originated after January 1 must comply with the new limits to remain eligible for mortgage underwriting under enterprise guidelines.
The distinction between baseline and high-cost limits creates two conforming loan tiers that are sometimes called "standard conforming" and "high-balance conforming." High-balance conforming loans meet all other enterprise eligibility criteria but carry slightly higher guarantee fees (g-fees) than standard conforming loans, which typically translates to a small rate premium — often 25 to 50 basis points — visible in rate sheets.
Common scenarios
Borrower in a baseline county: A borrower purchasing a single-family home in a county with a median home value below the high-cost threshold will face the $766,550 ceiling for 2024. A loan of $770,000 in that county does not conform, requiring either a jumbo loan or a price restructuring with a larger down payment to bring the financed amount below the limit.
Borrower in a high-cost metro: In San Francisco County, California, where FHFA designated the maximum high-cost limit, the 2024 one-unit ceiling is $1,149,825. A loan at $1,100,000 still qualifies as a high-balance conforming loan, remaining eligible for Fannie Mae and Freddie Mac purchase and avoiding the stricter loan-to-value ratio requirements typical of jumbo products.
Multi-unit investment purchase: An investor purchasing a 3-unit property in a baseline county faces a 2024 limit of $1,120,350, significantly above the one-unit ceiling. Understanding unit-count scaling is critical during mortgage pre-approval for multifamily purchases.
Mid-year county reclassification: Counties occasionally shift between baseline and high-cost status year over year. A borrower locking a rate in December on a purchase closing in January must confirm which year's limits apply, since the mortgage rate lock and the closing date can straddle an annual recalculation.
Decision boundaries
The central decision point is whether a loan amount, after accounting for down payment, falls at or below the applicable county limit for the given unit count.
| Property Type | 2024 Baseline Limit | 2024 High-Cost Ceiling |
|---|---|---|
| 1-unit | $766,550 | $1,149,825 |
| 2-unit | $981,500 | $1,472,250 |
| 3-unit | $1,186,350 | $1,779,525 |
| 4-unit | $1,474,400 | $2,211,600 |
Source: FHFA 2024 Conforming Loan Limit announcement
Conforming vs. jumbo threshold: A loan exceeding the applicable county limit by even one dollar disqualifies from enterprise purchase. Borrowers above the limit must pursue jumbo loans, which impose stricter debt-to-income ratio requirements — typically a maximum of 43 percent versus up to 50 percent on some conforming products — and require larger cash reserves.
Conforming vs. government-backed threshold: FHA loan limits are set separately by HUD under a different calculation tied to area median home prices, and are generally lower than the conforming ceiling in most counties. A borrower choosing between conforming and FHA loans must compare both the applicable loan limit and the FHA mortgage insurance premium against private mortgage insurance costs on a conforming product.
VA and USDA loans: VA loans have no conforming loan limit for eligible veterans with full entitlement following the Blue Water Navy Vietnam Veterans Act of 2019 (Pub. L. 116-23, enacted June 25, 2019). That Act made two significant changes effective upon enactment: it eliminated the VA loan limit for veterans with full entitlement, and it extended VA home loan benefits to veterans who served in the offshore waters of the Republic of Vietnam — a population previously excluded from the presumption of herbicide exposure under the Agent Orange Act. Veterans with remaining or impaired entitlement due to an active VA loan may still face effective loan limits tied to their available entitlement. Lenders may also apply internal overlays above the statutory floor. USDA loans carry their own geographic and income eligibility restrictions independent of FHFA limits entirely.
The practical implication is sequential: determine county classification → confirm unit count → verify the applicable 2024 limit → compare financed amount → select loan product accordingly. Any loan within the conforming boundary retains access to the competitive pricing that Fannie Mae and Freddie Mac's mortgage-backed securities market enables.
References
- Federal Housing Finance Agency — Conforming Loan Limits
- FHFA 2024 Conforming Loan Limit Announcement
- FHFA House Price Index Data
- Housing and Economic Recovery Act of 2008, Pub. L. 110-289
- Blue Water Navy Vietnam Veterans Act of 2019, Pub. L. 116-23
- Fannie Mae Selling Guide — Loan Limits
- Freddie Mac — Loan Limits
- 12 U.S.C. § 4511 — Federal Housing Finance Agency, via Cornell LII