Homebuyers just got an extra boost in borrowing power after the Federal Housing Finance Agency (FHFA) increased conforming loan limits to $806,500 for single-unit properties, the federal regulator said Tuesday.
The FHFA said the new conforming loan limits for mortgages backed by Fannie Mae and Freddie Mac represent a $39,950 increase from 2024, reflecting continued home price appreciation across the United States.
The loan limit changes, which go into effect on Jan. 1, follow a 5.21% jump in average home values in the U.S. between the third quarters of 2023 and 2024, according to FHFA’s House Price Index report.
In high-cost housing markets where median home values exceed the baseline loan limit by 115% or more, buyers have access to even higher loan amounts. For 2025, the high-cost area loan limit will rise to $1,209,750 for single-unit homes. The high-cost limit also applies to properties in Alaska, Hawaii, Guam and the U.S. Virgin Islands, which have special statutory provisions.
The FHFA said all but six U.S. counties will see higher loan limits next year.
FHA loan limits get a boost for 2025, too
The Federal Housing Administration (FHA) also announced increases to FHA loan limits for the new year. The low-cost area “floor” for one-unit homes will rise to $524,225 in 2025, up from the current limit of $498,257. The high-cost area “ceiling” will increase to $1,209,750 in 2025, up from $1,149,825 in 2024, the FHA said Tuesday.
The agency noted that maximum FHA loan limits will increase in 3,151 counties next year beginning on Jan. 1.
Additionally, the FHA increased the loan limit for its Home Equity Conversion Mortgage (HECM) to $1,209,750. That’s up from $1,149,825 in 2024. A HECM loan is a federally insured reverse mortgage product that allows senior homeowners aged 62 or older to tap their home equity as an income stream in retirement.
Here’s a full look at FHA loan limits for 2025 for one- to four-unit properties.
| Property size | Low-cost area “floor” | High-cost area “ceiling” | Alaska, Hawaii, Guam and U.S. Virgin Islands |
| One unit | $524,225 | $1,209,750 | $1,814,625 |
| Two units | $671,200 | $1,548,975 | $2,323,450 |
| Three units | $811,275 | $1,872,225 | $2,808,325 |
| Four units | $1,008,300 | $2,326,875 | $3,490,300 |
Why loan limits matter
Conforming loan limits are the maximum loan size of mortgages acquired by Fannie Mae and Freddie Mac, government-sponsored enterprises that buy and sell most conventional home loans in the U.S., helping maintain liquidity and stability in the mortgage market.
Mortgages that exceed conforming loan limits are considered jumbo loans because they fall outside of FHFA’s loan size guidelines. Jumbo loans often have higher interest rates, require a larger down payment and cash reserves, and are harder to qualify for.
The FHFA’s decision to raise conforming loan limits tracks with the agency’s mandate to keep pace with national home-price appreciation, which has soared nearly 50% from the first quarter of 2020 to the second quarter of 2024 due to historically low housing inventory, increased construction costs and strong buyer demand, according to the National Association of Home Builders (NAHB).
However, without these annual adjustments, more buyers would be forced into costlier and harder-to-get jumbo loans, potentially freezing those consumers out of the housing market entirely.
