Low-Cost Area Mortgage Limits

The low-cost limit of 524,225 serves as the bottom of the range for FHA loan limits, while the “ceiling” serves as the top. For 2025, the national high-cost area ceiling for a one-unit property is 1,209,750, which is 150 percent of the national conforming loan limit. Most counties in the U.S. will fall at the floor of 524,225, while major metropolitan areas with expensive real estate will be capped at the ceiling. Areas with moderate pricing will have a limit somewhere between these two figures based on their specific median home prices.

Yes, there is a mechanism for appealing the limits if a community believes the FHA’s calculation does not reflect actual local market conditions. Any request to change the mortgage loan limits must be submitted to the FHA within 30 days of the publication of the annual limits. The appeal must include sufficient housing sales price data listing one-family properties sold within the applicable 12-month look-back period (November through October of the previous year) to justify a higher limit calculation for that specific jurisdiction.

A county will have a limit higher than the $524,225 floor if local housing market data shows that home prices are higher than average. Specifically, if 115 percent of the median house price in that county exceeds the $524,225 floor, the FHA sets the limit at that higher calculated amount, up to the national ceiling. This system is designed to accommodate areas with moderate to high housing costs so that borrowers are not priced out of the market due to a loan limit that is too low for the area.

No, the standard low-cost limit of 524,225 does not apply to “Special Exception Areas,” which include Alaska, Hawaii, Guam, and the Virgin Islands. Due to the significantly higher costs of construction in these regions, the National Housing Act establishes much higher ceilings. For 2025, the one-unit mortgage limit in these special exception areas is set at 1,814,625. This adjustment ensures that residents in these specific territories have access to adequate federal mortgage financing despite the unique economic conditions that drive up local housing costs.

Yes, while the limit for a one-unit property is 524,225, the FHA provides higher loan limits for multi-unit properties to account for their higher value and income-generating potential. For 2025, the low-cost area limits for multi-unit properties are set at 671,200 for a two-unit property, 811,275 for a three-unit property, and 1,008,300 for a four-unit property. These higher limits allow borrowers in low-cost areas to finance duplexes, triplexes, and fourplexes while utilizing the benefits of FHA insurance, provided they occupy one of the units.

The updated mortgage limits for 2025 became effective for all FHA case numbers assigned on or after January 1, 2025. This date refers to the specific administrative step where the lender requests a case number from the FHA system to track the file, not necessarily the date you started your loan application or the date of your closing. If a case number was assigned on December 31, 2024, the lower 2024 limits would apply. Any case number assigned from January 1 onward utilizes the new $524,225 floor.

Yes, you can purchase a home with a sales price higher than the $524,225 limit, provided you have the funds to cover the difference. The FHA limit applies to the mortgage amount, not the purchase price of the property. For a purchase transaction, the maximum mortgage is typically 96.5 percent of the Adjusted Value. If the home price exceeds the loan limit, you would need to increase your down payment to ensure the final loan amount does not exceed $524,225. You generally cannot finance the difference into the FHA loan.

No, the $524,225 limit does not apply to every county; rather, it serves as the baseline or minimum limit. FHA mortgage limits are calculated based on the median house prices within a specific Metropolitan Statistical Area (MSA) or county. If 115 percent of the median home price in a specific area is below $524,225, the limit for that area defaults to this floor. However, in areas where 115 percent of the median home price exceeds this floor, the limit will be higher, potentially reaching up to the high-cost ceiling.

The low-cost area limit is determined by a statutory formula mandated by the National Housing Act. Specifically, the FHA “floor” is set at 65 percent of the national conforming loan limit established for the Federal Home Loan Mortgage Corporation (Freddie Mac). For 2025, the national conforming loan limit was set at $806,500. Therefore, the FHA calculated the low-cost limit by taking 65 percent of $806,500, which results in the $524,225 figure. This linkage ensures that FHA limits adjust annually in response to broader shifts in the national housing market.

For the calendar year 2025, the Federal Housing Administration (FHA) has established the national low-cost area mortgage limit, often referred to as the “floor,” at $524,225 for a one-unit property. This figure represents the minimum maximum loan amount available for FHA-insured mortgages in any county across the United States. It ensures that even in areas where median home prices are significantly lower than the national average, borrowers still have access to a standardized level of federal mortgage insurance. This limit applies to FHA case numbers assigned on or after January 1, 2025.