FHFA Increases 2025 Loan Limits: New Baseline Set at $806,500
The Federal Housing Finance Agency (FHFA) has announced the conforming loan limits for 2025, marking an increase in borrowing power for homebuyers. These limits dictate the maximum loan amounts for mortgages acquired by Fannie Mae and Freddie Mac.
Baseline Loan Limits for 2025
The baseline loan limits for one-unit properties in the contiguous United States, District of Columbia, and Puerto Rico have been raised to $806,500, a 5.21% increase from 2024. For properties in Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the baseline limit is $1,209,750.
Here’s a breakdown of the baseline limits across different property types:
| Units | Contiguous U.S., D.C., Puerto Rico | Alaska, Guam, Hawaii, U.S. Virgin Islands |
|---|---|---|
| 1 Unit | $806,500 | $1,209,750 |
| 2 Units | $1,032,650 | $1,548,975 |
| 3 Units | $1,248,150 | $1,872,225 |
| 4 Units | $1,551,250 | $2,326,875 |
High-Cost Area Loan Limits
For high-cost areas, where median home prices exceed the baseline limits, the loan limit ceilings are higher. These areas have a one-unit limit of $1,209,750 in the contiguous U.S., D.C., and Puerto Rico.
| Units | High-Cost Areas (Contiguous U.S., D.C., Puerto Rico) |
|---|---|
| 1 Unit | $1,209,750 |
| 2 Units | $1,548,975 |
| 3 Units | $1,872,225 |
| 4 Units | $2,326,875 |
Effective Date
The new loan limits apply to mortgages delivered on or after January 1, 2025. Loans processed before this date must comply with 2024 limits. Additionally, loans categorized as “high-balance” (exceeding baseline limits but within high-cost area ceilings) must meet specific requirements outlined by Fannie Mae.
Why It Matters
The increased limits reflect rising home prices and aim to provide greater access to affordable financing. This is particularly beneficial for homebuyers in competitive markets, offering higher borrowing power without crossing into jumbo loan territory.
For more details, visit FHFA’s website to explore county-specific 2025 conforming loan limits.
