2025 Conforming Loan Limits: What Homebuyers Need To Know

If you’re planning to buy a home in 2025, understanding conforming loan limits could save you thousands of dollars—or open the door to even more financing options. These limits, set annually by the Federal Housing Finance Agency (FHFA), determine the maximum size of a mortgage that Fannie Mae and Freddie Mac can purchase or guarantee. In plain terms: it’s the difference between a conventional conforming loan and a jumbo loan, which comes with stricter requirements.

Here’s what’s new in 2025, why it matters, and what you can do to make smart mortgage decisions this year.

What Are Conforming Loan Limits?

Conforming loan limits are the cap on the size of home loans that can be acquired by government-sponsored enterprises like Fannie Mae and Freddie Mac. These limits vary by location, based on average home prices in each area, and are reviewed annually by the FHFA.

In most of the U.S., the baseline conforming loan limit for a single-family home in 2025 has been increased to $750,000, up from $766,550 in 2024. That’s good news for buyers in a rising-rate, high-price housing market.

2025 Conforming Loan Limits By Property Type

Note: These are general limits. Higher-cost areas have higher limits—sometimes exceeding $1 million for single-family homes.

Want to know your local limit? Contact an ALCOVA Mortgage professional for personalized guidance.

What About High-Cost Areas?

If you’re buying in places like California, New York, Virginia’s DC suburbs, or parts of Colorado, the limit could be higher thanks to local housing costs. These high-cost conforming loan limits can go up to $1,125,000 for one-unit properties in 2025.

Not sure whether your county qualifies as high-cost? We’re happy to help you navigate that.

When Does a Loan Become a Jumbo Loan?

If your loan amount exceeds the conforming loan limit for your county, it’s classified as a jumbo loan.

Here’s the catch:

• Jumbo loans typically have stricter credit score requirements
• You’ll likely need a larger down payment
• Debt-to-income ratios need to be tighter
• Interest rates might be higher (though not always)

That’s why staying within conforming limits—when possible—can make the mortgage process smoother and more affordable.

Why Do Conforming Loan Limits Matter?

Understanding these limits is critical for:

• Budget planning: You’ll know how much home you can buy before hitting jumbo territory.
• Loan options: Conforming loans come with more flexible terms, including lower down payments and more lenient credit requirements.
• Saving money: You might avoid higher jumbo loan interest rates and fees.

At ALCOVA Mortgage, we’ll help you explore your options whether you’re shopping within conforming limits—or ready to go jumbo.

How Are Loan Limits Determined?

The FHFA uses the House Price Index (HPI) to assess year-over-year changes in home values. If prices rise (as they have in recent years), the FHFA increases conforming loan limits to reflect that shift. The 2025 increase continues this trend, giving buyers more flexibility in a market where home values remain elevated.

Next Steps: How To Prepare For Your 2025 Mortgage

1. Check your county limit – Use the FHFA map tool or talk to an ALCOVA Loan Officer.
2. Determine your price range – Factor in local limits to avoid jumbo loan requirements.
3. Get pre-approved – Know where you stand before you shop.
4. Explore your options – We’ll help you weigh conforming vs. jumbo, fixed vs. adjustable, and other loan choices.

The Bottom Line

The 2025 conforming loan limit increase gives homebuyers more borrowing power in a high-cost housing market. Whether you’re buying your first home, upgrading, or investing, knowing where you stand in relation to these limits is key to making confident, strategic decisions.

At ALCOVA Mortgage, we’re here to guide you every step of the way. Let’s talk about your 2025 home goals and build a mortgage plan that works for you.

Connect with a local loan expert today