Will Conventional Loan Limits Increase in 2025?
FHFA announced official 2025 loan limits: $806,500 for 2025, up 5.2% from 2024.
Each year, the Federal Housing Finance Agency (FHFA) reviews home price changes to determine conventional loan limits for the upcoming year.
For 2025, the FHFA has reviewed its House Price Index, or the “FHFA HPI®”, to determine new limits. Those limits rose 5.2%. The new limits are as follows.
Units | Standard Limits 2025 | High-Cost Limits 2025 |
1 | $806,500 | $1,209,750 |
2 | $1,032,650 | $1,548,975 |
3 | $1,248,150 | $1,872,225 |
4 | $1,551,250 | $2,326,875 |
How Conventional (Conforming) Loan Limits Are Determined
Conforming loan limits are the maximum loan amounts for Fannie Mae- and Freddie Mac-eligible loans.
The FHFA determines conforming loan limits by comparing year-over-year home price changes. Specifically, it compares third-quarter home prices from the previous year to third-quarter prices for the current year to set next year’s loan limits.
For example, the FHFA reviewed home price changes from Q3 2023 to Q3 2024 to arrive at 2025 conforming loan limits.
How Much Did 2025 Loan Limits Increase?
Conventional loan limits increased as follows:
$766,550 in 2024 → $806,500 in 2025
According to FHFA, 2025 loan limits were determined as such:
Percentage change:
= (2024 Q3 HPI – 2023 Q3 HPI) / 2023 Q3 HPI
= (409.43 – 389.14) / 389.14
= 0.0521 (5.21%)
This calculation determined that the conforming loan limit would rise by about 5.2%.
Related: Will FHA Loan Limits Increase in 2025?
When Are 2025 Loan Limits Available?
Most lenders begin accepting 2025 loan limits as soon as they are announced by FHFA. Borrowers may take advantage of higher 2025 limits beginning November 26, 2024, but check with your lender to make sure.
Could 2025 Conventional Loan Limits Have Decreased?
Conventional loan limits can not decrease, according to the FHFA. It states that conforming loan limits may not go down even if its home price index falls.
Instead, conventional loan limits would remain constant until home prices rebounded to reach their previous highs. Only when home prices exceeded previous levels would loan limits start rising again.
Likewise, a high-cost county that experienced a median home price decrease would keep its loan limit until prices rose past previous levels.
Conventional Loan Limit History
Following are 1-unit standard limits over the past ten years plus our 2025 estimate.
| Year | 1-Unit | Increase |
| 2025 | $806,500 | 5.2% |
| 2024 | $766,550 | 5.6% |
| 2023 | $726,200 | 12.2% |
| 2022 | $647,200 | 18.0% |
| 2021 | $548,250 | 7.4% |
| 2020 | $510,400 | 5.4% |
| 2019 | $484,350 | 6.9% |
| 2018 | $453,100 | 6.8% |
| 2017 | $424,100 | 1.7% |
| 2016 | $417,000 | 0.0% |
| 2015 | $417,000 | 0.0% |
About Conventional Loans
Most conventional loans are regulated by Fannie Mae and Freddie Mac. Applicants need a credit score of at least 620, but get the best rates and mortgage insurance costs with higher credit. Down payments can be as little as 3%, lower than the FHA minimum. Because of efforts of the Fannie and Freddie to expand availability of its products, conventional loans have become a favorite of first-time buyers who may not have qualified in the past.
Should You Wait Until 2025?
Home prices are continuing to rise despite high rates. Waiting until 2025 to capture larger conventional loan limits is unnecessary since lenders have started accepting the new higher limits already.
