FHFA Announces Baseline Conforming Loan Limit Will Increase to $806,500

After the release of the FHFA house price index for September last week, the FHFA released the conforming loan limits for 2025.

From the FHFA: FHFA Announces Conforming Loan Limit Values for 2025

The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2025. In most of the United States, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 (or 5.2 percent) from 2024. ….

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2024, which increased their CLL values. The new ceiling loan limit for one-unit properties will be $1,209,750, which is 150 percent of $806,500.

Note that there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, next year the CLL is $806,500 for one-unit properties in low-cost areas. The four-unit limit is $1,551,250.

For high-cost areas like Los Angeles County, the CLL is $1,209,750 for one-unit properties (50% higher than the baseline CLL) and the four-unit limit is $2,326,875.

The CLL for each county is available at 2025 Conforming Loan Limits (excel file).

During periods when house prices decline, the CLL is not reduced. The CLL was at $417,000 from 2006 through 2016 and only increased slightly in 2017 as the house price index caught back up to the previous high reached during the housing bubble. This graph shows the CLL since 1979. The CLL was unchanged from 2006 though 2016.

What about FHA insured loans? From the FHA:

FHA's nationwide forward mortgage limit "floor" and "ceiling" for a one-unit property in CY 2025 are $524,225 and $1, 209,750, respectively.

The current FHA insured limit (low-cost area) is 65% of $806,500 or $524,225. In high-cost areas, the FHA insured limit could be as high as $1, 209,750. The limit varies by geographical area (based on average house prices).