Fannie Mae Lender Letter (LL-2023-09) addressed the confirmation of conforming loan limit values for 2024. The loan limit values are increasing, Fannie Mae announced in a press release.
The new loan limit for most of the country will be $766,550, a 5.56 percent increase over the 2023 limit, and is effective for whole loans delivered to Fannie Mae and loans in MBS pools with issue dates on or after Jan. 1, 2024.
The Federal Housing Finance Agency (FHFA) has issued the conforming loan limit values that will apply to conventional loans to be acquired by Fannie Mae in 2024. The first mortgage conforming loan limit values are defined in terms of baseline loan limits and high-cost area loan limits.
Whole loans delivered through Dec. 31 must comply with the 2023 limits (“Purchase Requested” status in PE-Whole Loan and Loan Delivery).
MBS pools with Dec. 1 pool issue dates must comply with the 2023 limits, and MBS pools with Jan. 1, 2024, pool issue dates must comply with the 2024 limits (even if delivered in December). Lenders must ensure the appropriate identification of high-balance loans at delivery using Special Feature Code 808.
High-cost area loan limits are derived from median home prices estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD). FHA will permit a 30-day appeals period during which requests for individual area median home price increases will be evaluated, the release stated.
FHFA will issue a subsequent announcement if any individual high-cost area loan limit is increased as a result of the appeals process.
Loans subject to the high-cost area limits are referred to as high-balance loans and must comply with the high-balance loan requirements described in the Selling Guide. All conforming loan limit values apply to the original loan amount of the mortgage loan, not to its balance at the time of purchase by Fannie Mae.
“Lenders are responsible for ensuring that the original loan amount of each mortgage loan does not exceed the applicable loan limit for the specific area in which the property is located,” Fannie Mae stated in the release. “The 2024 loan limits will be applied to Desktop Underwriter (DU) loan casefiles submitted (or resubmitted) on or after the weekend of Dec. 2.
Loan casefiles underwritten through DU prior to Dec. 2 that receive an ineligible recommendation due only to exceeding the 2023 loan limit may be delivered after Jan. 1, 2024, (or in Jan. 1, 2024, MBS pools), Fannie stated. The loan casefile does not have to be resubmitted to DU if the only reason for the DU ineligible recommendation is due to the loan amount, and the loan amount complies with the applicable 2024 conforming loan limit value.
Fannie Mae also noted that for loan applications dated, or loan casefiles created, before Dec. 2, the 2023 designation of high-cost or non-high-cost area will be used to determine the applicable area median income that applies to the first-time homebuyer LLPA waiver. On and after Dec. 2, the 2024 designations will be used.