FHA Loan Limits In 2024 | Bankrate (2024)

FAQs

FHA Loan Limits In 2024 | Bankrate? ›

The maximum loan limits for FHA forward mortgages will rise in 3,138 counties. In 96 counties, FHA's loan limits will remain unchanged. The HECM maximum claim amount will increase from $1,089,300 in calendar year 2023 to $1,149,825 effective for FHA case numbers assigned on or after January 1, 2024.

The maximum loan limits for FHA forward mortgages will rise in 3,138 counties. In 96 counties, FHA's loan limits will remain unchanged. The HECM maximum claim amount will increase from $1,089,300 in calendar year 2023 to $1,149,825 effective for FHA case numbers assigned on or after January 1, 2024.

FHA Mortgage Rate Predictions for 2024

Business Insider repeats the Fannie Mae prediction for 2024 that rates may reside between 6.4% and 7.1% for 30-year fixed-rate conventional mortgages. The National Association of Realtors takes a less conservative approach, predicting rates could fall as low as 6.1% in 2024.

The FHA recommends a DTI ratio of 43%. In addition, the gross mortgage payment should not exceed 31% of your income. To help you qualify for an FHA loan, lenders may consider other compensating factors, such as large cash reserves or future income potential.

While there's no limit to how many FHA mortgages you can get during your lifetime, you can generally only have one FHA loan at a time because you can only have one primary residence. This restriction helps keep the loan program – and its lenient requirements – from being used to purchase investment properties.

The upfront MIP is 1.75% of the loan amount, though this can be rolled into the loan. If, for example, you are borrowing $200,000, the UFMIP will be $3,500. The cost of annual mortgage insurance premiums was recently reduced. Borrowers with down payments under 5%, and with loans less than $726,200, were paying 0.85%.

That being said, there are still far more buyers than sellers even with this negative first-time homebuyer news, meaning that there will not be a market crash likely. According to MCT housing market experts and other experts in the field, the likelihood of a real estate housing market crash in 2024 is low.

For 2024, the upper limit is $766,550 to $1,149,825, depending on location. Jumbo loans are mortgages that exceed these limits in their respective counties.

The three primary factors that can disqualify you from getting an FHA loan are a high debt-to-income ratio, poor credit, or lack of funds to cover the required down payment, monthly mortgage payments or closing costs.

Can you get a mortgage with 55% DTI? ›

For FHA and VA loans, the DTI ratio limits are generally higher than those for conventional mortgages. For example, lenders may allow a DTI ratio of up to 55% for an FHA and VA mortgage. However, this can vary depending on the lender and other factors.

As a general guideline, 43% is the highest DTI ratio a borrower can have and still get qualified for a mortgage. Ideally, lenders prefer a debt-to-income ratio lower than 36%, with no more than 28%–35% of that debt going toward servicing a mortgage. 1 The maximum DTI ratio varies from lender to lender.

Therefore, a more precise way to determine how much you should spend would be to calculate what percent of your monthly gross income will be spent on housing costs. This is referred to as the "debt-to-income" ratio, or front-end DTI. The rule of thumb is that this number should be no more than 28%.

According to HUD, the maximum FHA lending amount for high-cost areas (such as large metropolitan areas) is $1,149,825 for 2024. In lower-cost areas, the FHA limits are based on county, but generally, for one-unit properties the 2024 limit is $498,257.

The FHA uses two crucial factors to determine these limits: the property's location (a low-cost area versus a high-cost area) and the type of property (single-family or multi-family).

FHA home loan rules permit more than one person to be obligated on the mortgage, and there are situations where multiple borrowers may wish to purchase a home together even if only one of those borrowers will actually live in the home.

In its April Mortgage Finance Forecast, the Mortgage Bankers Association predicts that mortgage rates will fall from 6.8% in the first quarter of 2024 to 6.4% by the fourth quarter. The industry group expects rates will fall below the 6% threshold in the fourth quarter of 2025.

Every year, the FHA reviews the limits and updates them if needed based on the changes in market conditions.

For example, Maricopa County and Pinal County have the highest limits, with $530,150 for one-unit properties, $678,700 for two-unit properties, $820,350 for three-unit properties, and $1,019,550 for four-unit properties.

From January 1, 2024, through December 31, 2024, the threshold amount is $32,400.