Conforming Loan Limits By County 2023
What You Should Know
- The low-cost area standard limit is $726,200.
- The high-cost area standard limit is $1,089,300.
- The designated area standard limit is $1,633,950.
- The standard limits increase with the number of units, up to four.
Jumbo loans are needed when the mortgage amount required exceeds the conforming loan limit. Jumbo loans do not have an upper limit, which means that jumbo loans can be as large as the lender is willing to lend out. On the other hand, there is a lower limit on jumbo loans because if the mortgage principal is within the conforming loan limits, then there is no need for issuing a jumbo loan. The conforming loan limit for most counties in the US increased to $726,200 for one-unit properties and to $1,396,800 for four-unit properties in 2023, which means that any loan that has a principal of over $726,200, will be considered a jumbo loan. Similarly, high-cost counties have a conforming loan limit reaching $1,089,300 for one-unit properties and up to $2,095,200 for four-unit properties.
Change in Conforming Loan Limits and Median Home Price
Understanding Conforming Loan Limits by County
Qualifying for a conforming loan generally means you'll receive lower interest rates. Lenders prefer conforming mortgages because they can quickly sell your debt to Fannie Mae or Freddie Mac. This is different from other types of mortgages where the lenders keep your mortgage and then have less money to lend. Aside from your credit score, debt-to-income, and loan-to-value, the major constraint is the maximum mortgage amount.
The Federal Housing Finance Agency (FHFA) determines the maximum conforming loan limit. The limit changes yearly depending on the housing price index (HPI) report.
If your mortgage exceeds the limit, you will need a jumbo loan. These mortgages often have stricter qualification standards and a higher interest rate. Knowing your county's conforming loan limits is essential to ensure you receive lower mortgage rates and more accessible qualification standards.
The conforming limits are broken into three categories; low-cost, high-cost, and designated areas. Your category is determined by multiplying the median home price by 1.15x. If the result is less than the benchmark, you qualify as a low-cost area. The 2023 baseline cutoff between low and high-cost areas is $726,200.
For example, if the median home price in your county was $500,000, then you would be in a low-cost area. This is because multiplying $500,000 by 1.15 results in $575,000, less than $726,200.
| Low-Cost Area | High-Cost Area | Designated Area | |
|---|---|---|---|
| Qualifying Criteria | Median housing price x 1.15 is less than $726,200 | Median housing price x 1.15 is greater than $726,200 | Living in:
|
| Maximum Loan Amount (2023) |
|
|
|
| Low-Cost Area | High-Cost Area | Designated Area | |
|---|---|---|---|
| Qualifying Criteria | Median housing price x 1.15 is less than $647,200 | Median housing price x 1.15 is greater than $647,200 | Living in:
|
| Standard Maximum Loan Amount (2023) | $647,200 | $970,800 | $1,456,200 |
Low-Cost Areas
| One Unit | Two Units | Three Units | Four Units | |
|---|---|---|---|---|
| Maximum Loan Amount | $726,200 | $929,850 | $1,123,900 | $1,396,800 |
| Maximum Loan Amount | |
|---|---|
| One Unit | $647,200 |
| Two Units | $828,700 |
| Three Units | $1,001,650 |
| Four Units | $1,244,850 |
Low-cost areas have a maximum median home price of $631,480. This is because multiplying $631,480 by 1.15x results in the benchmark price of $726,200. Homes in this area can't have a mortgage exceeding $726,200; otherwise, you will need a jumbo loan.
However, your mortgage size can increase depending on the number of units you purchase. The conforming loan limit will increase if you buy a two-unit property. Similarly, the maximum mortgage limit increases with each amount of units, up to four units.
High-Cost Areas
| One Unit | Two Units | Three Units | Four Units | |
|---|---|---|---|---|
| Maximum Loan Amount | $1,089,300 | $1,394,775 | $1,685,850 | $2,095,200 |
| Maximum Loan Amount | |
|---|---|
| One Unit | $970,800 |
| Two Units | $1,243,050 |
| Three Units | $1,502,475 |
| Four Units | $1,867,275 |
High-cost areas have a median home price exceeding $631,500. This is because multiplying the median price by 1.15x exceeds the 2022 benchmark price of $726,200. Homes in high-cost areas can't have a mortgage size exceeding $1,089,300. You will need a jumbo loan if your mortgage exceeds this limit in 2023.
$1,089,300 is the limit for single-unit homes. The mortgage limit increases with each additional unit, up to four units. For example, a two-unit property in a high-cost area can have a loan of up to $1,394,775.
Designated Areas
| One Unit | Two Units | Three Units | Four Units | |
|---|---|---|---|---|
| Maximum Loan Amount | $1,633,950 | $2,092,150 | $2,528,775 | $3,142,800 |
| Maximum Loan Amount | |
|---|---|
| One Unit | $1,456,200 |
| Two Units | $1,864,575 |
| Three Units | $2,253,700 |
| Four Units | $2,800,900 |
Four designated areas don't follow the standard conforming loan limits. They include Alaska, Hawaii, Guam, and the Virgin Islands. The maximum conventional mortgage limits in these areas are higher than in the high-cost areas. The limits are a maximum of 1.50x the high-cost area limits.
These areas have a higher limit due to increased construction and housing prices. Although living in these areas doesn't increase the limit for each county. It means that some counties will surpass the mortgage limit of high-cost areas.
For 2023, the baseline limit is $1,633,950. As always, the limit increases with more units.
Change in Conforming Loan Limit since 2008
The data below shows the change in the conforming limits for a single-family unit since the Housing Market Crash of 2008. The average loan limit is the conforming limit for most counties in the US. The limit for high-cost areas is always 150% more than the average loan limit. There was a 6.87% increase in the average loan limit from 2018 to 2019, followed by a 5.4% increase from 2019 to 2020, and lastly a 7.41% increase from 2020 to 2021. The chart also shows the median house prices in the following years. The limits increase with the median house price, but the limits can never decrease. The conforming limits were not changed between the period of 2008 – 2016 as median home prices had not recovered enough.
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