Conforming loan limits have increased for 2025
You can now pay more with a conventional loan
If you’ve paid any attention to U.S. economic news over the last year, you’re likely familiar with the effect that inflation has had. For those who may not know, inflation is when prices go up over time, meaning that the same dollar buys you a bit less than it used to. It’s like seeing your grocery bill rise even if you’re buying the same items every week.
Inflation applies to housing as well, as the housing market has been a record string of home price increases over the last few years. For example, the median existing home price a year ago was $394,300—now it is $404,500. To contend with this increase, the Federal Housing Finance Agency (FHFA) is raising its conforming loan limits.
The FHFA announced today the updated baseline conforming loan limit for 2025 will be $806,500, an increase of $39,950 from 2024. The new limit for one-unit properties in most high-cost areas will be $1,209,750.
Ready to take advantage of the higher loan limits? Start your homebuying journey today by getting pre-approved.
What does this mean?
Each year, conforming loan limits are adjusted to keep up with rising home prices across the U.S. A conforming loan is one that meets specific dollar limits and guidelines set by the Federal Housing Finance Agency (FHFA), as well as the lending criteria of Freddie Mac and Fannie Mae. For loans that go beyond these limits—known as jumbo loans—lenders often have stricter requirements. So, the updated conforming loan limit for 2025 could make it easier for you to buy the home you want.
Starting in 2025, the baseline limit for single-family home mortgages purchased by Fannie Mae and Freddie Mac will rise from $766,550 to $806,500 in most of the continental U.S. That means any loan at or below $806,500 can qualify for conforming loan rates, which are typically lower than jumbo loan rates.
How can you take advantage?
With this higher loan limit, you now have the opportunity to qualify for a larger loan with more flexible guidelines than before. A home that might have required a jumbo loan in the past can now be financed with a conforming loan, bringing several advantages along with it:
- Lower interest rates, on average
- More loan options to choose from
- Lower down payment requirements
- Fewer mortgage reserves needed
In other words, buying the home you want just got a little easier. And at Rate, we’re here to help you make the most of these new limits, so you can get into the home that’s right for you—without the added hurdles of a jumbo loan.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Rate for current rates and for more information.
Rate is not affiliated with the Federal Housing Finance Authority.