FHFA releases 2025 Conventional Loan Limits

The Federal Housing Finance Agency (FHFA) has released conforming loan limits to be used for the calendar year 2025. Across the US, loan limits for conventional loans will increase to $806,500, and in markets considered “High cost” by FHFA, those limits will increase to $1,209,750.

This is important for home buyers and home owners because it increases the amount that can be borrowed for loans using conventional guidelines – for homeowners, that means 3-5% minimum down payment requirements, and for homeowners, they can refinance with conventional loan terms up to those amounts.

For multi-unit properties, those loan limits are even higher, as can be seen in the table below. It’s important to note that these loan limits are in effect with many lenders today but technically are in place for loans delivered to Fannie Mae or Freddie Mac on or after January 1, 2025 – delivery dates are important to understand in this case – delivery occurs after a loan is closed and funded with a lender. Files are often audited, packaged for sale, then delivered, so many lenders can offer conventional loan limits for 2025 today assuming their loans will be delivered in the new year.

Typically, annual loan limits for FHA & VA loans are released shortly after FHFA’s announcement so we expect to see those soon as well. Loan limits increasing roughly $40k from 2024 levels is indicative of home values continuing to climb, with loan limits increased to help home buyers and owners keep up with persistent home appreciation across much of the US.

Since Jumbo loans (those above conforming loan limits) often come with stricter terms than conventional financing (in the form of higher down payment requirements, higher minimum credit scores, or sometimes stringent reserve requirements), rising conventional loan limits will provide relief and optimal financing options for many people looking to buy a home in 2025. For home owners, they’ll have the ability to tap into more home equity at competitive rates.

A final note – some lenders (our team included) will begin offering loans under the 2025 conventional loan limits immediately, while others may lag behind a week or so – it’s important to note that this may impact rate quotes for shopping consumers, so if you’re shopping for a mortgage, be sure to ask about loan limits and whether the lender you’re talking with is quoting pricing based on 2024 or 2025 limits (if your loan amount will be between those 2024 and 2025 limits).