What Will FHA Loan Limits Be for 2024?
Not all government home loans are the same. VA loan limits used to apply to all borrowers, but thanks to changes in federal law those limits only apply to VA loan applicants with partial entitlement. But those who seek an FHA mortgage should always know the current year’s ceiling for an FHA mortgage.
If you are waiting for the loan limits for government-backed mortgages for 2024 to be published to decide whether to commit this year or next, there is an important factor you should know about.
Home Loan Limits Change Year to Year
If the FHA loan limits for the prior year are lower than the limits for the coming year, much will depend on when your application is processed. For FHA mortgages, the loan limit which applies depends on what date the FHA case number was assigned.
If your FHA loan case number was assigned prior to the new year, the previous year’s loan limits apply to your mortgage. If your FHA loan case number is assigned after the new year, (even if you applied in the previous year) your FHA loan limits will be those effective in the new year.
FHA Loan Limits and Jumbo Loans
If you need more home loan than the current limit allows, you can apply for an FHA jumbo loan which exceeds the county limit, but has higher FICO score requirements.
If you were already concerned about your ability to qualify for an FHA mortgage before thinking about a jumbo loan, it may be wise to build in some extra time to work on your credit and debt ratios first.
Home Loan Limits
If you buy a home with an FHA mortgage your loan limits go higher when applying for a loan on a multi-unit property.
And not all housing markets have the same costs, so be sure to check to see whether you are shopping in an area the FHA deems to be a high-cost area since the loan limits are higher in these counties.
FHA loans in high-cost areas have higher loan limits but they do not feature a corresponding increase in FHA loan approval requirements. On paper, the FHA does not ask for higher FICO scores for home loans in high-cost areas.
That said, your lender may have standards above the FHA minimums. It’s always good to ask a participating lender about their FICO score requirements and debt ratio guidelines to see what the differences might be compared to the FHA minimums.
The FHA and HUD have not released the 2024 loan limits at press time but many speculate the limits could be almost 4% higher than 2023.
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