2025 Increases to Loan Limits
What are loan limits?
A loan limit is the maximum amount an applicant may borrow. Loan limits are dependent on the type of property that is being bought and where it is located.
FHA Loan Limits:
FHA has a standard limit for single-family homes. There are sequential increases in limits depending on 2-, 3-, and 4-unit buildings. Extended loan limits will also change in high income areas.
Loan limits are determined by the conforming loan limits from the Federal Housing Finance Agency. FHA limits are set at 65% of the new conforming loan limits.
Conventional Loan Limits:
The Housing and Economic Recovery Act (HERA) requires the limits for Conventional Loans, also called Conforming Loans, be adjusted on a yearly basis to reflect the average home price in the U.S.
What is an FHA Loan?
Administered by the Federal Housing Administration (FHA), this mortgage is a popular option for first-time homebuyers. It is specifically designed to assist borrowers to purchase a home with less stress by providing lower down payment options and more flexible qualifying criteria.
What are the new FHA loan limits for 2025?
Below is a list of the new FHA loan limits effective for FHA case numbers assigned on or after January 1, 2025.
Limits will vary by county, based on the median home price for the area. For a one-unit property, the loan limit is $524,225 in low-cost areas, while the loan limit increases to $1,209,750 in high-cost areas.
There are special exceptions for Alaska, Hawaii, Guam and the Virgin Islands, where the limit goes up to $1,814,625 for a one-unit property.
What is a Conventional Loan?
A Conventional Loan is often referred to as a Conforming Loan because it conforms to requirements set by Fannie Mae and Freddie Mac, two agencies that standardize mortgages. There are many benefits to using a Conventional Loan, including flexible qualifying guidelines for your down payment, loan term and rate options.
What are the new limits for Conventional Loans?
The 2025 conventional loan limit for one-unit properties will be $806,500. In high-cost areas, the limit increases to $1,209,750. The exact limit of what you can borrow will depend on your area, as shown in FHFA’s Loan Limit Map.
As with FHA loans, there are exceptions for properties in Alaska, Guam, Hawaii and the Virgin Islands, where the limit is $1,209,750. These regions, as well as a few other states, do not have any high-cost areas in 2025.
If you’re interested in seeing how these loan limits can help you buy a Lennar home, we’re here to help! We’ll pair you with an experienced Loan Officer who can help make sense of these numbers, compare loan options and finance your dream home. Contact us to get started!
Sources:
Maximum Mortgage Limits 2025, U.S. Department of Housing and Urban Development
FHFA Announces Conforming Loan Limit Values for 2025, Federal Housing Financing Agency
Originating & Underwriting Loan Limits, Fannie Mae
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