Conforming Loan Limit Calculator | FREEandCLEAR (2024)

FAQs

How is conforming loan limit calculated? ›

Conforming loan limits are tied to home prices. Each year, the FHFA updates its baseline loan limit based on its House Price Index (HPI) report, which tracks the average increase in home values over the previous year. The new loan limits are calculated each year based on third-quarter data from the FHFA HPI.

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.

Conventional (conforming)

Loan amount must be $766,550 or less in most counties and may be as high as $1,149,825 in high-cost counties.

A conforming loan is one that meets specific criteria set by the FHFA, including conforming loan limits. A conventional loan is any loan that isn't guaranteed or insured by the government (FHA, VA and USDA loans). Conventional loans can be either conforming or non-conforming.

43% to 50%. This range represents a good debt-to- income ratio for a mortgage. Most lenders look for a DTI ratio of 43% or less, although some will accept up to 50%.

In pricey housing markets — including much of California, all of New York City, the District of Columbia and the entire states of Alaska and Hawaii — the limit is $1,149,825, up from $1,089,300 in 2023. Some markets fall in between. In Colorado's Boulder County, the 2024 limit for conforming loans is $856,750.

Most conventional mortgages meet Fannie Mae and Freddie Mac requirements and are therefore also considered “conforming,” but jumbo loans – which are nonconforming – are also considered conventional mortgages because they're not insured by the federal government.

It defines a single-family home as any home with one to four units. The borrower must have the ability to repay. To qualify for a conforming loan, you'll generally need a credit score of at least 620, a DTI below 50% and a maximum loan-to-value ratio (LTV) of 97% (meaning you'll need to put at least 3% down).

Down payment: While 20 percent down is the standard, many fixed-rate conventional loans for a primary residence allow for a down payment as small as 3 percent or 5 percent. Private mortgage insurance (PMI): If you put down less than 20 percent, you'll have to pay PMI, an additional fee added to your payments.

Can you put 5% down on a conventional loan? ›

It is a common misconception that in order to obtain a conventional loan, you must pay a 20% down payment, but that is not the case. In fact, you can qualify for a conventional loan by putting down as low as a 5% down payment.

Down Payment Requirements for a Conventional Loan

While a 20% down payment is often recommended, it's not always required. A lender will look at the big picture when evaluating your mortgage application. Depending on your specific situation, you can put down as little as 3% when taking out a conventional mortgage.

A conventional ARM loan is usually a 30-year amortization, but has an interest rate that is locked for a period shorter than the length of the loan. The most popular conventional ARM loan rate mortgage has a rate that is fixed for a period ranging from 3 years to 5 years to 7 years, and even up to 10 years.

Conforming loans are backed by Fannie Mae and Freddie Mac and can't exceed FHFA loan limits ($766,550 in most areas).

The FHA loan limit “floor” is 65 percent of the national conforming loan limit, and its “ceiling” is 150 percent of the national conforming limit. For 2024, the national conforming loan limit for a one-unit property is $766,550.

Conforming loan limits vary based on two factors: the number of units being purchased with the property and the geographical location of the property. These limits are set by the Federal Housing Finance Agency (FHFA) and are adjusted annually.

Conforming loans are backed by Fannie Mae and Freddie Mac and can't exceed FHFA loan limits ($766,550 in most areas). Nonconforming loans can be bigger but may cost more.

Lenders will calculate your maximum mortgage eligibility by weighing your income against your debts, the purchase price of the house, your down payment, the mortgage's interest rate, and property taxes and insurance. * Points are equal to 1% of the loan amount and lower the interest rate.

The 5/1 ARM will offer a fixed interest rate for the first five years of the loan term, while the 3/1 has a fixed rate for only the first three years. Once these teaser rates expire, the ARM will reset and be subject to interest rate adjustments for the remaining 25 or 27 years of the 30-year mortgage.