Fannie Mae Loan Conforming Loan Limits 2023

A magnificent all brick, 2-story home If you're in the market for a mortgage loan in 2023, it's essential to understand conforming loan limits. Conforming loans adhere to standards set by Fannie Mae and Freddie Mac and include favorable terms for borrowers. For 2023, conforming loan limits are increasing in response to rising home values. This article will explain conforming loans, how limits are determined, and what the changes mean for homebuyers this year.

What Are Conforming Loan Limits?

Conforming loans are mortgages that meet the standards established by Fannie Mae and Freddie Mac, which are government-sponsored enterprises. To qualify, loans must not exceed a maximum amount known as the conforming loan limit. This limit is determined by the average value of homes in the United States and usually changes yearly.

For 2023, most areas' baseline conforming loan limit is $726,200. This means any mortgage under this amount is considered working. The Federal Housing Finance Agency (FHFA) establishes this baseline limit annually based on changes in home values.

Why Do Conforming Loan Limits Matter?

Whether a loan conforms to the limit set for that year matters for both lenders and borrowers. Fannie Mae and Freddie Mac can purchase conforming loans, ensuring lenders have a market for selling them. This gives lenders an incentive to offer conforming loans with better terms.

For borrowers, the benefits of conforming loans include:

  • Lower interest rates and monthly payments
  • A more extensive selection of mortgage products
  • Easier qualification guidelines
  • Lower down payment requirements

Since conforming loans offer preferable financing, staying under the conforming limit when borrowing is generally recommended.

How Are the 2023 Conforming Loan Limits Changing:

For 2023, conforming loan limits are increasing across most of the U.S. due to rising home values. Here are the fundamental changes:

  • The baseline limit will increase to $726,200, up from $647,200 in 2023. This change reflects a 12.5% annual increase in home prices.
  • In higher-cost areas, limits will be capped at 150% of the baseline instead of 125%. This "high-cost area" limit will be $1,089,300 for 2023.
  • Limits in high-cost Alaska, Guam, Hawaii, and the U.S. Virgin Islands will be capped at the previous level of $970,800.
  • Some counties will see larger limit increases based on significant gains in area median home values.

Overall, the changes account for rapid annual home price appreciation nationwide. Higher limits will allow more homebuyers to obtain favorable conforming loan financing.

What Should Borrowers Know About the 2023 Conforming Loan Limits?

If you're applying for a mortgage in 2023, here are a few things to keep in mind regarding conforming limits:

  • Check if the county you're buying in has a higher limit than the baseline. Limits can be found on the FHFA website.
  • Be aware that you may qualify for a larger conforming loan in high-cost counties compared to prior years.
  • Even if your loan amount exceeds the conforming limit, you may still qualify for non-conforming jumbo loans with reasonable terms based on your finances.
  • Work with a loan officer familiar with how changing limits may impact the mortgage you qualify for and can afford.
  • Act quickly once you find a home to start the lending process and lock in favorable interest rates. Rates are expected to remain relatively high in 2023.

The new higher limits create opportunities to obtain prime conforming loans in more high-cost real estate markets across the country. This can maximize purchasing power for buyers in those areas.

The FHFA adjusts conforming loan limits as home values rise to maintain access to affordable financing. The increases for 2023 will allow more buyers to obtain prime conforming mortgages, especially in high-cost metro areas. Understanding these limits can help you identify the best mortgage options when shopping for a home loan. Connecting with an experienced loan officer is critical to navigating how conforming loans can benefit you in today's housing market.

In summary, key things to remember about 2023 conforming loan limits are:

  • The baseline limit is increasing to $726,200.
  • The high-cost area cap was raised to $1,089,300.
  • Check county limits, which may exceed the baseline.
  • Higher limits expand access to favorable conforming loans.
  • Connect with a loan officer to discuss options.

2023 Conforming Limits

Units Contiguous States, the District of Columbia, and 
Puerto Rico
Alaska, Guam, Hawaii, and
the U.S. Virgin Islands
1 $726,200 $1,089,300
2 $929,850 $1,394,775
3 $1,123,900 $1,685,850
4 $1,396,800 $2,095,200

Frequently Asked Questions About Conforming Loan Limits

Q: What are conforming loan limits?

A: Conforming loan limits are the maximum loan amounts a borrower can obtain under specific loan programs. The Federal Housing Finance Agency (FHFA) determines these limits based on the annual percentage change in the national average home price.

Q: How do conforming loan limits work?

A: Conforming loan limits work by establishing a maximum loan amount that borrowers can obtain while qualifying for a conforming loan program. If a loan exceeds the conforming loan limit for a specific area, it is considered a non-conforming loan.

Q: What is the conforming loan limit for 2023?

A: The conforming loan limit 2023 is a maximum of $647,200 for one-unit properties in most areas of the United States. However, this limit may be higher in high-cost areas.

Q: What is the difference between conforming and FHA loans?

A conforming loan is a mortgage that meets the requirements set by Fannie Mae and Freddie Mac, whereas the Federal Housing Administration insures an FHA loan. FHA loans generally have more lenient qualifying criteria and may be suitable for borrowers who cannot meet the requirements for a conforming loan.

Q: How do I qualify for a conforming loan?

A: To qualify for a conforming loan, you'll need to meet specific criteria, including having a good credit score, a stable income, and a manageable level of debt. Your loan amount must not exceed your area's maximum conforming loan limit.

Q: What is a baseline loan limit?

A: The baseline loan limit is the maximum loan amount that can be considered a conforming loan for one-unit properties in most areas of the United States. In 2023, the baseline loan limit will be $647,200.

Q: What is a high-cost area?

The local median home value in a high-cost area exceeds the FHFA's base conforming loan limit. In these areas, borrowers may be eligible for higher maximum conforming loan limits.

Q: What is the ceiling loan limit for one-unit properties?

The ceiling loan limit is the maximum amount that can be considered a conforming loan for one-unit properties in high-cost areas. In 2023, the ceiling loan limit will be $970,800.

Q: What is the Housing and Economic Recovery Act (HERA)?

In 2008, Congress passed a law known as the Housing and Economic Recovery Act (HERA). It increased the conforming loan limits to their current levels and created a mechanism to adjust each year to reflect the average U.S. home price change.

Q: What are the requirements for higher maximum conforming loan limits?

A: To be eligible for higher maximum conforming loan limits in high-cost areas, borrowers must meet specific requirements, such as occupying the property as their primary residence and demonstrating sufficient income and creditworthiness.


The conforming loan limits for 2023 are increasing in response to rapid gains in the House Price Index (HPI) over the past year. With median home values rising nationwide, the baseline conforming limit is up to $726,200, and the cap for high-cost areas has increased to $1,089,300. These changes expand the possibilities for homebuyers to obtain conventional conforming loans in 2023, even in more expensive real estate markets. This year, the new limits provide additional purchasing power for those looking to buy a home with prime financing. Understanding the conforming loan limit for 2023 is critical to getting the best mortgage when you're ready to make that purchase.

Conforming Loan Limit Values
The Federal Housing Finance Agency (Fhfa)