The Federal Housing Finance Agency (FHFA) announced today that the conforming loan limit (CLL) for mortgages acquired by Fannie Mae and Freddie Mac in 2025 will rise to $806,500, an increase of $39,950 (or 5.2%) from 2024.
- This marks the first time the baseline limit has surpassed $800,000, reflecting the resilience of home prices despite high mortgage rates and muted sales activity.
- For high-cost areas, where 115% of the local median home value exceeds the baseline, loan limits will rise even further. The new ceiling for one-unit properties in these regions will be $1,209,750, or 150% of the baseline.
Why? The increase is tied to the Housing and Economic Recovery Act (HERA), which mandates annual adjustments to the CLL to reflect changes in U.S. home prices. According to FHFA’s Home Price Index (HPI), prices rose 5.21% on average between the third quarters of 2023 and 2024, driving the higher limit.
Bottom line: Despite rates staying higher for longer and sluggish sales, home prices continue to rise pushing the conforming loan limit higher.