Will Conventional Loan Limits Increase in 2025?
According to our research, conventional loan limits could increase 6.14%, from $766,550 in 2024 to $813,625 in 2025. FHFA will post final numbers later this year.
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 will review its House Price Index, or the “FHFA HPI®”, to determine new limits. Will those limits rise from 2024 levels?
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 2022 to Q3 2023 to arrive at 2024 conforming loan limits.
Will 2025 Loan Limits Increase?
As of this writing, there is no 2024 third-quarter data because it’s not over yet. However, we can gain insights by looking at year-over-year data for Q2.
According to FHFA, 2024 loan limits were determined as such:
Percentage change:
= (2023 Q3 HPI – 2022 Q3 HPI) / 2022 Q3 HPI
= (392.04 – 371.4) / 371.4
= 0.0555 (5.56%)
This calculation determined that the conforming loan limit would rise by about 5.56%.
Let's take the same formula using 2024’s Q2 data to predict 2025 conventional loan limits.
Percentage change:
= (2024Q2 HPI – 2023Q2 HPI) / 2023Q2 HPI
= (406.14 – 382.64) / 382.64*
= 0.0614 (6.14%)
If 2025 loan limits were based on Q2 data, conventional loan limits could increase 6.14% from $766,550 in 2024 to $813,625 in 2025.
Under this same logic, high-cost loan limits would increase from $1,149,825 in 2024 to roughly $1,220,450 in 2025 (high-cost limits are set at 150% of the standard limit).
Here’s how the base and high-cost 2025 conventional loan limits would look under the above assumptions.
Units | Standard Limits 2025 Estimate | Maximum High-Cost Limits 2025 Estimate |
1 | $813,625 | $1,220,450 |
2 | $1,041,775 | $1,562,425 |
3 | $1,259,200 | $1,888,600 |
4 | $1,564,950 | $2,347,075 |
Keep in mind that a lot can happen in a quarter. Since new 2025 limits will be based on 2024 Q3 data and not Q2, there could be a larger or smaller increase, or no increase at all.
Can 2025 Conventional Loan Limits Decrease?
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 (est.) | $813,625.00 | 6.1% |
| 2024 | $766,550.00 | 5.6% |
| 2023 | $726,200.00 | 12.2% |
| 2022 | $647,200.00 | 18.0% |
| 2021 | $548,250.00 | 7.4% |
| 2020 | $510,400.00 | 5.4% |
| 2019 | $484,350.00 | 6.9% |
| 2018 | $453,100.00 | 6.8% |
| 2017 | $424,100.00 | 1.7% |
| 2016 | $417,000.00 | 0.0% |
| 2015 | $417,000.00 | 0.0% |
Should You Wait Until 2025?
Home prices are continuing to rise despite high rates. Waiting until 2025 to capture a larger conventional loan limit could end up costing you.
It might be a better move to use a jumbo loan or combine a HELOC with a conventional loan now if you qualify. Then, there’s a potential to refinance into a conventional loan in 2025 if loan limits increase or rates drop.
Methodology and notes:
*Note that loan limits are based on FHFA’s expanded-data indexes, which is why the above figures differ from commonly cited HPI numbers. Additionally, FHFA uses a multiplier above the 1-unit high-cost limit to determine 2-, 3-, and 4-unit high-cost maximums:
2-unit: 1.28021583 X 1-Unit High-Cost Max
3-unit: 1.54748201 X 1-Unit High-Cost Max
4-unit: 1.92314149 X 1-Unit High-Cost Max
Sources:
FHFA Loan Limits Addendum
Fannie Mae
Tim Lucas is the editor and Lead Analyst for MortgageResearch.com. Tim spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. He has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, and more.
