Conforming loan limit tops $1 million in high-cost areas.
The Federal Housing Finance Agency (FHFA) raised conforming loan limits for 2023 to keep pace with rising home prices. The maximum conforming loan limit for one-unit properties in most parts of the U.S. is now $726,200, up from $647,200 in 2022. In high-cost areas*, the ceiling loan limit for one-unit properties is $1,089,300, which is 150% of $726,200.
How Does This Benefit Borrowers?
The conforming loan limit is the maximum amount you can borrow on a loan backed by Fannie Mae or Freddie Mac. Loans that adhere to Fannie and Freddie’s requirements are an attractive option for buyers because they are typically easier to qualify for and may offer lower interest rates. With the new, higher limits, more borrowers will be able to qualify for a conforming loan and take advantage of the increased purchasing power.
How Are Loan Limits Calculated?
Each year, the FHFA adjusts the conforming loan limit to reflect the change in home prices. According to the FHFA House Price Index report, home prices rose 12.21%, on average, between the third quarters of 2021 and 2022.** As a result, the baseline loan limit increased by the same amount.
2023 Loan Limits
Old Floor Limit - $647,200
New Floor Limit - $726,200
Old Ceiling Limit - $970,800
New Ceiling Limit -$1,089,300
View the map of 2023 loan limits by county.
*High-cost areas are those in which 115% of the local median home value exceeds the baseline conforming loan limit.
**According to FHFA's seasonally adjusted, expanded-data HPI.