New Loan Limits Are Out for 2025

Hot off the press!! The Federal Housing Finance Agency (FHFA) has announced that the baseline conforming loan limit for 2025 will increase to $806,500, up by $39,950 from the 2024 limit. In high-cost areas, the limit will rise to $1,209,750, which is 150% of the baseline limit. These adjustments reflect a 5.2% increase in U.S. home prices from the previous year.

This change allows more buyers to qualify for conforming loans, which typically come with lower interest rates and more flexible terms compared to jumbo loans. It can also make homeownership more accessible, especially in high-cost markets​. Below is a list of the many benefits of the higher loan limits.

Increased Borrowing Power

With the baseline limit raised to $806,500 (and up to $1,209,750 in high-cost areas), you can qualify for a larger loan without needing a jumbo loan. Jumbo loans typically come with higher interest rates and stricter qualification requirements. Now, more homes fall under conforming loan guidelines, which simplifies the financing process​

Conforming loans usually offer lower interest rates compared to jumbo loans. By keeping your loan within the conforming limit, you could secure a more affordable monthly payment, saving thousands over the life of your mortgage​.

Lower Down Payment Requirements

Conforming loans often require lower down payments than jumbo loans, sometimes as low as 3% for qualified buyers. This means you can buy a home with less upfront cash​

Loans under conforming limits generally have more lenient credit score requirements and less stringent cash reserve needs compared to jumbo loans. This can make it easier for first-time buyers or those with moderate savings to qualify​

 Favorable Loan Terms

These loans are backed by Fannie Mae and Freddie Mac, providing access to a variety of programs and protections that make homeownership more attainable and sustainable