Limits on the Maximum Loan Amount for Conventional Loans

Because loan limits vary by county and number of units, borrowers and lenders should verify the specific limit for the property’s location. The Federal Housing Finance Agency (FHFA) provides a list of conforming loan limits for all counties and county-equivalent areas in the United States. Additionally, they offer a map and a “Loan Limit Geocoder” tool on their website, which allows users to search by specific address or batch of addresses to determine the applicable limit. Checking these resources is essential for determining whether a loan will be conforming or high-balance.

For a county to be designated as a high-cost area, 115% of the local median home value must exceed the baseline conforming loan limit. In such cases, the specific loan limit for that county is set at that calculated figure (115% of the median home value), up to the maximum ceiling. The ceiling is capped at 150% of the baseline limit. This formula ensures that the loan limits rise to accommodate expensive markets but do not exceed a federally mandated maximum cap, which for 2025 is $1,209,750 for one-unit properties.

The conforming loan limits apply strictly to the original principal balance of the mortgage, not the sales price or the appraised value of the property. This means a borrower can purchase a home that costs significantly more than the loan limit, provided they make a sufficiently large down payment to bring the mortgage amount down to or below the cap. For example, a buyer could purchase a home for $1 million in a standard area (limit $806,500) if they put down at least $193,500. The eligibility is determined by the loan size at origination.

Yes, special statutory provisions apply to Alaska, Hawaii, Guam, and the U.S. Virgin Islands due to the consistently higher costs of construction and housing in these regions. In these locations, the baseline loan limit is statutorily set at the ceiling level used for high-cost areas in the contiguous United States. Therefore, for 2025, the baseline loan limit for a one-unit property in these specific areas is $1,209,750, regardless of the local median home value. This exception ensures that borrowers in these non-contiguous areas have adequate access to mortgage credit.

If a requested loan amount exceeds the specific conforming limit for the county where the property is located, it is classified as a “Jumbo” loan. Jumbo mortgages are non-conforming loans because they cannot be purchased or guaranteed by Fannie Mae or Freddie Mac. Due to the lack of government backing, lenders usually view these loans as carrying higher risk. Consequently, borrowers seeking Jumbo loans often face stricter underwriting standards, such as higher credit score requirements, lower debt-to-income ratios, and larger down payment requirements compared to conforming loans.

The Housing and Economic Recovery Act (HERA) mandates that the FHFA adjust the baseline conforming loan limits annually to reflect changes in the average U.S. home price. For the 2025 limits, the FHFA relied on its seasonally adjusted, expanded-data House Price Index (HPI), which indicated a 5.21% increase in house prices between the third quarter of 2023 and the third quarter of 2024. Consequently, the baseline loan limit was increased by this same percentage. This systematic adjustment prevents the loan limits from stagnating as real estate values appreciate over time.

A mortgage is classified as “high-balance” or “super conforming” when the original loan amount exceeds the general baseline limit ($806,500 for 2025) but remains within the specific high-cost area limit established for that county. While these loans are still eligible for purchase by Fannie Mae and Freddie Mac, they often come with distinct pricing adjustments and underwriting requirements compared to standard conforming loans. For instance, lenders may require a higher credit score or a larger down payment for high-balance loans to offset the potential risk associated with the larger loan size relative to the property value.

To support the financing of small residential income properties, the conforming loan limits are scaled upward for properties with 2 to 4 units. For 2025, the baseline limits in most of the United States are set at $1,032,650 for a two-unit property, $1,248,150 for a three-unit property, and $1,551,250 for a four-unit property. In designated high-cost areas, these figures are even higher, reaching up to 150% of these baseline amounts. This scaling allows investors or owner-occupants to finance multi-family structures using conventional mortgages rather than commercial loans.

For the year 2025, the Federal Housing Finance Agency (FHFA) has established the baseline conforming loan limit (CLL) at $806,500 for one-unit properties across most of the United States. This represents a significant increase of $39,950 from the previous year, reflecting the general rise in home prices. This limit serves as the maximum original principal balance for a conventional mortgage to be eligible for purchase or securitization by government-sponsored enterprises like Fannie Mae and Freddie Mac. Loans that remain at or below this threshold in standard areas are considered conforming loans and typically offer more favorable interest rates and terms.

In areas where the local median home value significantly exceeds the national average, the loan limits are set higher to accommodate the increased cost of housing. For 2025, the ceiling for these high-cost areas is set at 150% of the baseline limit. This means that for a one-unit property in the most expensive markets in the continental United States, the maximum loan amount can reach up to $1,209,750. These adjusted limits ensure that borrowers in expensive real estate markets still have access to federal mortgage liquidity without immediately being forced into the jumbo loan market.