The Federal Housing Finance Commission (FHFA) announced that the conforming loan limit for Conventional home loans in 2025 is going up to $806,500. 2024’s conforming loan limit was $766,550. That’s a 5.2% increase for the coming year. The conforming loan limit increase will help buyers more easily finance one-unit homes at the higher end of the price scale.
What Is a Conforming Loan Limit?
The conforming loan limits apply to Conventional home loans only. They are basically a dollar cap on the size of a conventional mortgage loan that Fannie Mae and Freddie Mac will purchase from mortgage companies and guarantee. Under the mandate of the 2008 Housing and Economic Recovery Act, the conforming loan limits are adjusted yearly to account for changes in the average home price in the United States.
The FHFA uses percentage change in the average home price from October the previous year to October this year, as indicated in the House Price Index report issued by the Federal Housing Finance Board, when adjusting the conforming loan limits for the coming year.
How the Conforming Loan Limit Works
Conforming loan limits are actually set on a county-by-county basis. It’s just that most counties are assigned what’s known as the ”baseline” conforming limit. For 2025, of course, that’s $806,500. There can be changes to the conforming loan limit based on regional economic disparities, though.
In areas where 115% of the local media home value exceeds the baseline conforming loan limit, the maximum loan value for that area will be set higher, as 150% of the baseline limit, or $1,209,750. Areas like Southern California, the Bay Area, South Florida and the greater New York metro area are examples of regions that usually have loan limits higher than the baseline number.
What If I Need a Home Loan Larger Than That?
A home loan larger than the conforming loan limit in your county (remember, the limit in most counties will be the baseline limit —$806,500) is called a Jumbo Home Loan. Fairway has plenty of Jumbo loan options, up to $3 million!
When a home costs $900,000 or more, you may need a Jumbo loan to finance it. Credit requirements are typically stricter, and mortgage rates are typically a little higher for Jumbo loans than for Conventional loans, but with Fairway, you have options!
