What the New FHFA Loan Limits for 2025 Mean for Our Community

1/8/2025

As your trusted community bank, we’re always keeping an eye on changes that could impact our customers. Recently, the Federal Housing Finance Agency (FHFA) announced an update to the conforming loan limits (CLLs) for 2025, increasing the baseline limit to $806,500 for one-unit properties—a 5.2% increase from 2024. Here’s what this means for you as a potential homebuyer or homeowner.

Why Did the FHFA Increase Loan Limits?

The FHFA adjusts conforming loan limits annually based on the average U.S. home price changes, as required by the Housing and Economic Recovery Act (HERA). This year’s adjustment reflects a 5.21% increase in average home prices between the third quarters of 2023 and 2024. This means the baseline CLL rose by $39,950 from last year’s $766,550.

What Are Conforming Loan Limits?

Conforming loans are mortgages that meet the standards set by Fannie Mae and Freddie Mac. Staying within these limits allows buyers to access lower interest rates and favorable terms compared to non-conforming or "jumbo" loans. Higher loan limits open more opportunities for buyers to finance homes without exceeding conforming loan thresholds.

Changes for High-Cost Areas

In high-cost areas where 115% of the local median home value exceeds the baseline limit, the ceiling for one-unit properties will rise to $1,209,750 in 2025. Additionally, Alaska, Hawaii, Guam, and the U.S. Virgin Islands will share this higher limit due to special statutory provisions. For most buyers, this means better options for purchasing homes in markets with elevated property values.

How Does This Affect You?

Easier Access to Affordable Financing: Buyers in our community can finance homes up to $806,500 (or more in designated high-cost areas) without needing a jumbo loan.
Potential for Larger Home Purchases: The increase gives buyers more flexibility to consider homes with higher price tags, particularly as home prices rise nationwide.
Refinancing Opportunities: If you currently have a non-conforming loan, you may be able to refinance into a conforming loan to take advantage of better terms.

Supporting Homebuyers in Our Community

At SSB, we’re here to guide you through every step of the home financing journey. Whether you’re a first-time buyer, looking to upgrade, or considering refinancing, our team can help you navigate these changes to find the best solution for your needs.

Get Started Today

Curious about starting your homebuying journey? Reach out to our team to discuss your options. We’re committed to helping you achieve your dream of homeownership while keeping the process simple, transparent, and tailored to your goals.