The Federal Housing Administration (FHA) has announced new loan limits for its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs for 2024, according to a press release by the FHA.
The increase is due to strong home price appreciation over the past year. FHA updates its annual loan limits using a formula prescribed in the National Housing Act, which uses county or Metropolitan Statistical Area (MSA) home sale data to derive new loan limits for the three different cost categories. The maximum loan limits for FHA forward mortgages will rise in 3,138 counties, while in 96 counties, FHA's loan limits will remain unchanged.
The HECM maximum claim amount will increase from $1,089,300 in 2023 to $1,149,825, effective for FHA case numbers assigned on or after Jan. 1, 2024, according to the press release. The National Housing Act requires FHA to set Single Family forward mortgage loan limits at 115% of area median house prices for a particular jurisdiction, subject to a specified floor and ceiling. The FHA-insured HECM maximum claim amount is calculated at 150% of the Freddie Mac national conforming limit of $766,550.
“The statutory loan limit increases announced today reflect the continued rise in home prices seen throughout most of the nation in 2023,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “The increases to FHA’s loan limits will enable homebuyers to use FHA’s low-down-payment financing to access homeownership at a time when a lack of affordability threatens to shut well-qualified borrowers out of the market.”
According to the U.S. Department of Housing and Urban Development (HUD), Gordon was nominated for this role and confirmed by the U.S. Senate on May 12, 2022. In her role, Gordon is responsible for FHA Single Family, Multifamily, and Healthcare mortgage insurance programs, serving over 7.5 million homeowners.
