Conforming Loan Limits Get a Boost in 2025: What You Need to Know!

The Federal Housing Finance Agency (FHFA) has announced an increase in conforming loan limits (CLLs) for 2025, reflecting the continued rise in U.S. home prices. The new baseline CLL for single-unit mortgages purchased by Fannie Mae and Freddie Mac will be $806,500—a 5.2% or $39,950 increase from the 2024 limit of $766,550.

This adjustment aligns with the Housing and Economic Recovery Act (HERA), which mandates annual revisions to loan limits based on changes in average home prices.

The baseline loan limit increase mirrors a 5.21% uptick in average U.S. home values between Q3 2023 and Q3 2024, as reported in FHFA’s latest House Price Index® (HPI). This index tracks nominal, seasonally adjusted home price changes and serves as the foundation for annual CLL updates.

For most markets, the baseline loan limit is the cap for loans eligible for purchase by the government-sponsored enterprises (GSEs). However, adjustments extend higher limits to designated high-cost areas and certain regions with unique statutory provisions.

In high-cost areas—where median home values exceed 115% of the baseline—the CLL increase will be more substantial. For 2025, the ceiling limit for single-unit properties in these regions will reach $1,209,750, equivalent to 150% of the new baseline.

Furthermore, residents in Alaska, Hawaii, Guam, and the U.S. Virgin Islands will benefit from the same elevated limit of $1,209,750 under statutory provisions. These adjustments aim to address the unique affordability challenges in areas with significantly higher home prices.

Notably, the 2025 conforming loan limits will be higher nationwide, with just six counties remaining unaffected by the changes due to local home price trends.

For industry professionals and stakeholders, FHFA has released supplementary materials to provide greater clarity on the updated limits:

• Comprehensive County-Level Limit Data: A spreadsheet listing 2025 limits for all U.S. counties.
• Interactive Loan Limit Map: A visual guide to regional limits.
• Methodology Addendum: Insights into how the CLL updates were calculated can be found in a detailed document.
• FAQs: An FAQ document addressing common questions about the loan limit adjustments.

Stakeholders with specific inquiries regarding the 2025 CLL values can contact FHFA directly at LoanLimitQuestions@fhfa.gov.

The implications of the revised CLLs extend broadly across the housing and mortgage sectors. By increasing conforming loan thresholds, homebuyers in high-cost markets may gain greater financing flexibility, potentially boosting overall housing affordability. Conversely, the rise in eligible loan amounts could contribute to sustained demand in an already tight housing market, underscoring the importance of monitoring home price trends and mortgage market dynamics.

As a regulator of Fannie Mae, Freddie Mac, and the 11 Federal Home Loan Banks, FHFA continues to ensure stability and equity in housing finance. With these 2025 CLL adjustments, the agency remains committed to supporting the accessibility and affordability of homes across diverse U.S. markets.

For additional updates on housing finance policies, visit FHFA’s official website.

Data reflects latest FHFA announcements as of November 26, 2024. Stay connected for further insights into evolving housing market trends.