2024 Mortgage Loan Limits
Mortgage loan limits will increase on January 1, 2024. In San Diego, the jumbo loan limit for a single family home will be $1,006,250.
Here is a current list of the limits for all counties in the United States.
San Diego County
Effective January 1, 2024, here are the three tiers of mortgages for properties in San Diego County:
- Conforming loans – up to $766,550.
- Super Conforming loans – between $766,550 and $1,006,250.
- Jumbo loans – Over $1,006,250.
When lenders talk about mortgage loan limits, they’re referring to conforming loan limits.
The conforming mortgage limit is $766,550. In San Diego County, because real estate is more expensive, the super conforming mortgage limit is $1,006,500. Loans between $766,550 and $1,006,250 are called super conforming. So while the conforming limit is still $766,550, you can take out a non-jumbo loan up to $1,006,250.
Many home buyers have to borrow above the San Diego County limit of $1,006,250. These loans are called jumbo mortgages.
So why do home buyers prefer conforming home loans over super conforming home loans or jumbo home loans? Conforming home loans usually have lower interest rates. In addition to higher interest rates, jumbo loans usually require higher fees, and stricter underwriting standards. This applies to conventional, FHA, and VA home loans.
In general, the best rates are for conforming loans up to $766,550.
Maximum Home Prices – non-jumbo loans
To avoid a jumbo loan in San Diego County, here are the maximum home prices, based on down payment:
20% down payment: $1,257,812 ($251,562 down payment, $1,006,250 loan)
10% down payment: $1,118,055 ($111,805 down payment, $1,006,250 loan)
5% (down payment: $1,059,210 ($52,960 down payment, $1,006,250 loan)
3% down payment: $790,258 ($23,708 down payment, $766,550 loan)
Here’s how the conforming limit has increased since 1970:
Multi-Family Properties
For properties that include more than one single-family residence, the 2024 San Diego loan limit is higher:
Duplex (a home divided into two residences): $1,288,200
Triplex (3 residences): $1,557,150
Quadriplex (4 residences): $1,935,150
Nearby Counties
Both Orange County and Los Angeles County have a super conforming loan limit of $1,149,825. Imperial, Riverside, and San Bernardino Counties have a loan limit of $766,550.
How Conventional Mortgages Work
A conforming or super conforming mortgage follows Fannie Mae and Freddie Mac guidelines, which allow the lender to sell your mortgage on the open market. So who are Fannie Mae and Freddie Mac, and what does the secondary mortgage market have to do with it?
Here’s a brief explanation of mortgage backing, conforming mortgage limits, and jumbo mortgages.
Mortgage Backing – Fannie Mae and Freddie Mac
Fannie Mae (FNMA, or The Federal National Mortgage Association) and Freddie Mac (FHLMC, or The Federal Home Loan Mortgage Corporation) are financial services corporations established by Congress, also known as government-sponsored enterprises (GSEs). They were created to promote the flow of credit, which in turn makes home ownership accessible to more Americans. They do this by creating a secondary mortgage market, which increases the supply of money available for mortgage lending.
How it works: After lenders make a mortgage to purchase or refinance a home, Fannie Mae and Freddie Mac buy the mortgage from the lender, so that the lender can have more money to lend out for another mortgage. Fannie Mae and Freddie Mac take the mortgages they have bought, pool them, and then sell them as mortgage-backed securities on the open market. They do this over and over again.
This is how the secondary mortgage market increases the supply of money available for mortgages: private investors provide cashflow for banks to continue to lend money. To learn more about the 2007 mortgage security meltdown, which created the 2008 worldwide financial crisis, read this Investopedia article.
Conforming Mortgage Loan Limits
Today, Fannie Mae and Freddie Mac back approximately 60% of all mortgages in the United States. But they won’t buy just any mortgage; they set rules to limit their risk of foreclosure. A conforming mortgage is one that follows Fannie Mae and Freddie Mac guidelines. Most lenders abide by these guidelines so that they can sell their home loans on the secondary mortgage market, and take that money to make more loans. One of these guidelines is the maximum amount of the loan, or the conforming mortgage limit.
The Federal Housing Finance Agency (FHFA), which has overseen Fannie Mae and Freddie Mac since 2008, publishes annual conforming mortgage loan limits. The mortgage limit amount depends on the type and location of the property. The limits are reviewed each year by the Housing and Economic Recovery Act (HERA), and are based on the FHFA’s Housing Price Index (HPI).
As of January 2024, the new loan limit for mortgages for single family properties in San Diego County is $1,006,250. This is $28,750 higher than the 2023 limit of $977,500.
Conventional Jumbo Mortgages
Loans that exceed mortgage limits are called jumbo mortgages. Jumbo mortgages often have stricter underwriting standards, and may involve higher down payments, higher interest rates, and higher fees. It can also be more difficult to refinance jumbo home loans.
FHA Mortgage Loan Limits
Loans that are guaranteed or insured by the Federal Housing Administration (FHA) also have mortgage loan limits. Even though the FHA is not related to Fannie Mae or Freddie Mac, they usually use the same loan limit amounts.
As of January 2024, the new loan limit for FHA mortgages for properties in San Diego County is $1,006,260. To check the limit outside of San Diego County, you can check the FHFA list of 2024 conforming loan limits.
FHA mortgage loan limits vary widely, as low as $766,550 in most areas, and as high as $1,149,825 in other areas.
FHA Jumbo Mortgages
If you need a loan that exceeds the mortgage loan limit, jumbo mortgages are available to FHA borrowers. As with conventional jumbo home loans, you may be required to provide a larger down payment, and there may be stricter underwriting standards.
VA Mortgage Limits
Effective January 1, 2020, there are NO mortgage limits for loans that the U.S. Department of Veterans Affairs (VA) insures. This new policy was written into the Blue Water Navy Vietnam Veterans Act of 2019. This means that while there are no mortgage limits, how much a borrower can borrow depends upon their lender’s qualification.
For more details, read my article about VA Loans.
The Bottom Line
Many home buyers in San Diego County need to borrow more than the superconforming mortgage limit, which requires a jumbo loan. In Carlsbad, for example, the average sales price for a detached home in September 2023 was $1,600,000 – almost $600,000 higher than superconforming mortgage limits. Check with your lender to find the best loan program for you.
In 2015, the Consumer Financial Protection Bureau released a toolkit to guide consumers through the process of shopping for a mortgage and buying a home. The Home Loan Toolkit is a helpful tool to help you plan your purchase.
If you’re thinking about buying a home, or refinancing your current home, you can also read about where you can go to get a mortgage, how to get mortgage preapproval, and how much a lender will allow you to borrow.
You can also read about conventional home loans, VA Home Loans, FHA Home Loans, Down Payment Assistance Programs for San Diego County home buyers, and Mortgage Relief Programs for current San Diego County homeowners. Contact me with any questions.
Happy home hunting!
I couldn’t have written this article without the expert advice of Nick Richardson:
Nick Richardson is a mortgage banker with EZ Fundings in San Diego, California, NMLS #966361. He can help you finance or refinance properties located in California. Nick can answer all of your questions about mortgage programs, with no hassle, no obligation. Contact him at 760-402-6962 or e-mail nick@ezfundings.com.
