Conventional loans are a method of financing a home purchase. Conforming conventional loans follow Fannie Mae and Freddie Mac guidelines, which includes loan limits. If you plan to purchase a home in Atlanta, Georgia, with a conventional loan, you may be subject to the conforming loan limit of the county where you plan to buy.
Here’s everything you need to know about Atlanta’s conventional loan limits, including how they’re determined and current limits for the 2024-2025 year.
What is a Conventional Loan?
A conventional loan is a mortgage not insured by the federal government. Unlike FHA or VA loans, conventional loans are issued through private lenders. Buyers with good credit scores and high down payments may choose conventional mortgages to enjoy lower interest rates. A conventional mortgage offers buyers a more streamlined process.
Conventional loans may be conforming or non-conforming. A conforming conventional loan means the lender adheres to federal guidelines, including FHA loan limits. A non-conforming conventional loan does not follow conforming loan limits. Lenders with conforming conventional loans usually offer lower interest rates and less strict requirements.
How Are Conventional Loan Limits Determined?
The U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency (FHFA) set conventional loan limits yearly.
FHA loan limits are based on each region's housing market, including average home prices and buyer demand. They change each year based on market trends. Atlanta, Georgia, for example, has noticed a strong market over the last decade, resulting in increasing conforming loan limits. As median home prices rise, so do loan limits.
2024 Conventional Loan Limits in Atlanta
Atlanta, Georgia, is in two counties: Fulton and Dekalb. Both have loan limits ranging from $766,550 to $1,149,825. Here are the conforming loan limits for Atlanta, Georgia:
- Single-Family Home: $766,550
- Duplex: $981,500
- Tri-Plex: $1,186,350
- Four-Plex: $1,474,400
The loan limit varies between Georgia counties based on the median sales price. High-cost areas are sometimes set at higher limits, but the limit in Georgia is $766,550 for a single-family home.
Non-conforming conventional loans allow buyers to exceed these loan limits. These loans are referred to as jumbo loans.
Why Do Loan Limits Matter for Homebuyers?
Loan limits should be an essential consideration when buying a home. Conforming loans offer buyers better interest rates and less strict eligibility requirements. However, you must stay within the year’s current loan limits to qualify for a conventional home loan.
Impact on Loan Programs
While financing may be available to some buyers who exceed FHA loan limits, this requires a different loan. Buying a home that exceeds these loan limits requires a jumbo loan, leading to higher interest rates and a higher down payment. Buyers seeking a jumbo mortgage will also need proof of sufficient income and a good credit score.
How Do Conventional Loan Limits Affect Your Mortgage?
FHA loan limits impact a borrower’s mortgage, including the approval process, down payment requirements, interest rates, and qualifications.
Jumbo loan approval will depend on the borrower’s income, which will usually need to be sufficient to cover the higher mortgage payment of jumbo financing. The down payment on a jumbo loan will also be higher than a conforming conventional loan to minimize the lender’s risk. A jumbo loan tends to have higher interest rates and closing costs.
Many lenders may also restrict properties purchased using a jumbo mortgage. For example, lenders will usually require an appraisal and inspection. They may deny the mortgage loan if the property isn’t worth the asking price.
Finally, a jumbo mortgage is generally only available when buying a primary residence. Buyers seeking a loan for a second home or investment property that exceeds conforming loan limits should seek expert advice to explore other loan options.
Are There Exceptions or Special Cases for Atlanta Homebuyers?
High-cost counties may have higher loan limits. However, Atlanta, which covers Dekalb and Fulton Counties, is limited to $766,550 for one-unit properties. This is the highest home loan limit available in Georgia, with some counties having a lower loan limit.
Buyers purchasing multi-units can qualify for a higher loan limit than those buying single-family homes. However, buyers will have to pay a higher down payment on a multi-unit than a single-family unit.
Conventional Loan Limits vs. Jumbo Loans
The most significant difference between conventional and jumbo loans is the loan limits. Home buyers who finance their Georgia purchase using a conforming conventional loan can expect a straightforward application process, a competitive interest rate, and standard down payment requirements.
Borrowers who want to exceed the conforming loan amount can finance using a jumbo loan. A jumbo loan is not backed by the federal government, which means a higher income and credit score are required. Buyers seeking an affordable monthly payment may prefer a conforming conventional loan.
How to Apply for a Conventional Loan in Atlanta
Are you ready to purchase your home using a conventional loan? Start the process with the following steps:
- Review Loan Options: Reviewing your mortgage options can help you choose the best one based on your financial situation.
- Contact a Local Lender: Contact a local lender familiar with the Atlanta, Georgia, housing market and programs.
- Gather Information: Gather your information as you prepare to apply. Determine where the down payment will come from. Request a copy of your credit report to determine your credit score. Gather your income information.
- Submit Application: Submit your application. A Georgia lender from TrueWay Mortgage will contact you to discuss your options and begin the underwriting process.
Tips for Homebuyers Navigating Conventional Loan Limits
Whether this is your first mortgage or you’re upgrading your home, shopping rates and lenders can get you the best mortgage. Here are a few tips to help navigate conventional loan limits in Georgia:
- Be sure to choose a lender familiar with the Atlanta market. While most lenders offer services to other states and counties, a local lender offers dedicated expertise.
- Stay within conforming loan limits. This will allow you to enjoy affordable monthly payments and competitive rates.
- Explore alternative loans when necessary. If a conventional mortgage doesn’t fit your financial situation, be ready to consider other options, like VA, USDA, or FHA loans.
- Prepare for the application process. Reviewing loan amount requirements, boosting your credit score, and saving up for a down payment can increase your chances of approval.
Maximizing Your Homebuying Potential with TrueWay Mortgage
Conforming conventional loans follow federal guidelines, offering buyers more beneficial loan terms. Understanding the loan limits in your state and county can help you prepare for the mortgage process.
TrueWay Mortgage is here to help buyers in Atlanta, Georgia, navigate the housing and financing process. Unlike larger banks, we have the local experience necessary to customize the loan process for our buyers.
Contact TrueWay Mortgage today to discuss loan options or to begin the loan application process.
