Will FHA Loan Limits Increase in 2025?
HUD has increased FHA loan limits for one-unit homes in most areas of the U.S. from $498,257 in 2024 to $524,225 in 2025, an increase of 5.2%.
Each year, the Department of Housing and Urban Development (HUD) sets new loan limits for its popular FHA mortgage based on year-over-year home price increases.
Following are 2025 FHA loan limits based on unit count and geographic area:
Units | Standard FHA Limits 2025 | FHA High-Cost Limits 2025 |
1 | $524,225 | $1,209,750 |
2 | $671,200 | $1,548,975 |
3 | $811,275 | $1,872,225 |
4 | $1,008,300 | $2,326,875 |
Higher limits were created for very high cost areas.
Units | Alaska, Hawaii, Guam, USVI |
1 | $1,814,625 |
2 | $2,323,450 |
3 | $2,808,325 |
4 | $3,490,300 |
How Much Did 2025 FHA Loan Limits Increase?
FHA loan limits increased as follows:
$498,257 in 2024 → $524,225 in 2025
It was an increase of 5.2%.
HUD sets FHA limits at 65% of national conventional loan limits set by the Federal Housing Finance Agency (FHFA).
FHFA determines conventional loan limits by comparing year-over-year home price changes in the third quarter as measured by its Home Price Index.
Conventional 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%)
FHA loan limits increased to 65% of the resulting conventional loan limit. Conventional loan limits rose from $766,550 in 2024 to $806,500 in 2025.
$806,500 X 65% = $524,225
About FHA Standard and High-Cost Loan Limits
Like conventional loans, FHA loans allow higher loan limits for properties in high-cost areas.
Interestingly, FHA high-cost limits match those of conventional loans, allowing up to 150% of the standard conventional limit.
Standard areas: 65% of the conventional limit
High-cost areas: 150% of the conventional limit
HUD also maintains a list of about 400 areas in which loan limits are somewhere between standard and high-cost levels. For example, Ocean City, New Jersey is eligible for an FHA limit of $667,000, both above the standard limit and below the maximum high-cost limit.
The 2025 limits for these areas are determined on a case-by-case basis depending on home price changes within the area.
Could 2025 FHA Loan Limits Have Decreased?
FHA loan limits cannot decrease even if Q3 2024 home prices would have declined from 2023 levels. In this case, FHA loan limits would remain the same.
Likewise, if a particular county’s home prices drop, FHA loan limits will stay the same, following the same guidelines FHFA sets for conventional loans.
When Will 2025 FHA Loan Limits Take Effect?
New loan limits can be applied to FHA case numbers created on or after January 1, 2025. A case number is typically created when the borrower:
1) Applies with the lender
2) Has a property address
Buyers can apply now and get pre-approved, but they may want to hold off on finding a property until after January 1 if they need the new higher loan limits.
Should You Wait Until 2025 to Buy?
If you find a house before 2025, and don't need higher limits, you should buy now before potential home price increases in the spring. You can also try a conventional loan. Lenders are accepting 2025 loan limits prior to January 1, up to $806,500 for a one-unit home in a standard-cost area.
