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Loan Limits by County and Program

Conforming loan limits, set annually by the FHFA, define the maximum loan amount Fannie Mae and Freddie Mac will purchase, with the 2025 baseline at $806,500 and a high-cost ceiling of $1,209,750 for single-unit properties . FHA, VA, and USDA each apply their own limit structures, and the applicable limit for a borrower's county directly affects which loan programs and pricing tiers are available.

Key Takeaways

  • The 2025 baseline conforming loan limit is $806,500 for a single-unit property, with a high-cost ceiling of $1,209,750 .
  • FHFA adjusts conforming limits annually based on the national House Price Index; limits can increase but cannot decrease.
  • FHA loan limits operate on a floor-and-ceiling structure, with the floor at 65% of the conforming limit and the ceiling matching the conforming high-cost maximum .
  • VA loans have no limit for veterans with full entitlement since the Blue Water Navy Vietnam Veterans Act took effect in 2020.
  • USDA loans have no specific loan amount limit but are constrained by borrower income and property location eligibility.
  • Loans above the baseline conforming limit but within high-cost area limits are classified as high-balance or super conforming, with slightly different pricing.
  • Borrowers near the conforming limit boundary should compare the cost of a slightly larger down payment (to stay conforming) against the higher requirements and rates of a jumbo loan.

How It Works

How FHFA Calculates the Annual Adjustment

Each year, FHFA compares the national average home price from the third quarter of the current year to the third quarter of the prior year using the FHFA House Price Index, which tracks purchase prices on properties with conforming mortgages. The percentage change in the index determines the percentage adjustment to the baseline conforming limit. If the HPI shows a 5.2% increase in average home prices, the baseline limit increases by 5.2% (rounded to the nearest $50 increment ). Because the limit is tied to a national average, it does not directly reflect local market conditions — individual counties may experience price changes very different from the national average. The high-cost area mechanism addresses this by allowing county-specific limits above the baseline where local median values warrant it. FHFA publishes the new limits in late November of each year, and the updated limits take effect on January 1 of the following year for loans with application dates on or after that date.

How High-Cost Area Limits Are Determined

For counties in designated high-cost areas, FHFA calculates the local loan limit as 115% of the county’s median home value, capped at 150% of the baseline national limit. This means a county with a median home value of $750,000 would have a calculated limit of $862,500 (115% of $750,000), which falls below the 2025 ceiling of $1,209,750 and would become the county’s specific limit . A county with a median home value of $1,200,000 would have a calculated limit of $1,380,000, but because this exceeds the ceiling, the county limit is capped at $1,209,750. Alaska, Hawaii, Guam, and the U.S. Virgin Islands receive special treatment and may have limits set at the ceiling regardless of local median values . The list of high-cost counties and their specific limits is published by FHFA alongside the baseline announcement.

How FHA Floor and Ceiling Limits Work

FHA’s floor-and-ceiling structure ensures a minimum loan limit in every county regardless of local home prices. The floor is set at 65% of the conforming baseline limit. In 2025, this means the minimum FHA limit for any county is $524,225 (65% of $806,500) . In counties where median home values support a higher limit, FHA calculates the limit using a similar methodology to FHFA’s conforming calculation. The FHA ceiling matches the conforming high-cost ceiling at $1,209,750 . This floor-ceiling structure means FHA limits are always at or below the corresponding conforming limit for a given county, which can make conventional loans a better fit for borrowers needing loan amounts above the FHA limit but below the conforming limit.

How VA Entitlement and County Limits Interact for Partial Entitlement

For VA borrowers with full entitlement, there is no loan limit and no interaction with county limits. For borrowers with partial entitlement, the VA county limit (which mirrors the conforming limit) determines the maximum guaranty. The VA guarantees 25% of the county limit. If a veteran has remaining entitlement of $100,000 and the county limit is $806,500, the maximum guaranty is 25% of $806,500, or $201,625. Since the veteran has only $100,000 of entitlement remaining, the VA can guarantee up to $100,000. Lenders typically require VA borrowers to have guaranty coverage equal to 25% of the loan amount; if the remaining entitlement does not provide this coverage, the veteran must make a down payment to cover the shortfall. The calculation is: Down payment = 25% of (loan amount minus the VA guaranty coverage available). This calculation can result in modest or significant down payment requirements depending on the gap between the veteran’s remaining entitlement and the desired loan amount.

Multi-Unit Property Limits

Conforming and FHA loan limits increase for properties with two, three, or four units, reflecting the higher purchase prices typical of multi-unit residential buildings. The 2025 conforming limits for multi-unit properties at the baseline level are approximately: $1,032,650 for two units, $1,248,150 for three units, and $1,551,250 for four units . High-cost area limits for multi-unit properties are calculated using the same 150% ceiling methodology. Borrowers purchasing a duplex, triplex, or fourplex as an owner-occupied primary residence can access these higher limits, which is a significant advantage for house-hackers and small-scale real estate investors who occupy one unit while renting the others.

Related topics include conventional loans explained, usda loans explained, jumbo loans explained, down payment requirements by loan type, and pmi and mortgage insurance explained.

Key Factors

Factors relevant to Loan Limits by County and Program
Factor Description Typical Range
County Location Loan limits vary by county based on local median home values. A borrower's county determines which specific limit applies for each loan program. Baseline $806,500 to high-cost ceiling $1,209,750 for 1-unit conforming
Property Unit Count Multi-unit properties (2-4 units) have higher conforming and FHA limits than single-unit properties, reflecting higher typical purchase prices. 1-unit baseline $806,500; 2-unit ~$1,032,650; 3-unit ~$1,248,150; 4-unit ~$1,551,250
Loan Program Conforming, FHA, VA, and USDA each apply different limit structures. FHA limits are typically lower than conforming limits in moderate-cost areas. FHA floor $524,225 to ceiling $1,209,750; VA no limit for full entitlement; USDA no loan limit
Annual HPI Adjustment Conforming limits change each year based on the FHFA House Price Index. Limits can increase but cannot decrease under HERA provisions. Recent annual increases have ranged from 1% to 18% depending on national home price trends
Proximity to Limit Boundary Borrowers with loan amounts near the conforming limit face strategic decisions about down payment size, program selection, and whether to pursue conforming vs. jumbo financing. Borrowers within $10,000-$50,000 of the limit often benefit from increasing the down payment to stay conforming

Examples

Borrower in a Baseline County Approaching the Conforming Limit

Scenario: A borrower is purchasing a $850,000 home in a county where the conforming limit is the baseline $806,500. The borrower has $120,000 available for a down payment. With 10% down ($85,000), the loan amount would be $765,000 — within conforming limits. With 5% down ($42,500), the loan amount would be $807,500 — $1,000 above the conforming limit, pushing the loan into jumbo territory.
Outcome: The 10% down payment keeps the loan conforming, providing access to standard conventional underwriting, competitive rates, and broad lender availability. The 5% down scenario would require a jumbo loan with higher rate, higher reserve requirements, and a minimum credit score typically of 700-720+. In this situation, the additional $42,500 down payment produces substantial savings through better loan terms. Alternatively, the borrower could put approximately 5.2% down ($44,200) to bring the loan amount to exactly $805,800, staying just under the conforming limit while minimizing cash outlay.

FHA Borrower in a Moderate-Cost County with a Lower FHA Limit

Scenario: A borrower with a 620 credit score is purchasing a $540,000 home in a county where the conforming limit is $806,500 but the FHA limit is $524,225 . The borrower prefers FHA due to the more lenient credit requirements but the purchase price exceeds the FHA limit.
Outcome: The borrower cannot use an FHA loan because even with the 3.5% minimum down payment ($18,900), the loan amount of $521,100 is close to but the home purchase at $540,000 with FHA's maximum loan of $524,225 means the borrower would need a down payment of at least $15,775 to stay within FHA limits. Alternatively, the borrower can pursue a conventional loan (within the $806,500 conforming limit) but must meet conventional credit requirements, which typically require a minimum 620 score with higher LLPAs and PMI rates at that score level. The FHA-to-conventional crossover is a common scenario in counties where FHA limits are significantly below conforming limits.

Veteran Purchasing in a High-Cost Area with Full Entitlement

Scenario: A veteran with full VA entitlement is purchasing a $1,100,000 home in a high-cost county. The conforming high-cost limit for the county is $1,209,750. The veteran uses a VA loan with no down payment.
Outcome: Because the veteran has full entitlement, there is no VA loan limit. The veteran can finance the entire $1,100,000 with zero down payment, subject to lender approval of income and creditworthiness. The VA funding fee applies to the full loan amount. This scenario illustrates the significant advantage of VA loans in high-cost markets, where a conventional borrower would need $110,000 to $220,000 as a down payment (10-20%), and a jumbo borrower might face even stricter requirements. The veteran's zero-down option preserves cash and provides access to a property that might otherwise require years of additional saving.

Common Mistakes to Avoid

  • Using outdated loan limit figures from a prior year when evaluating borrowing capacity

    Conforming and FHA limits change every January 1. A borrower using 2024 limits to plan a 2025 purchase may underestimate their conforming borrowing capacity or incorrectly conclude they need a jumbo loan. Always verify the current year's published limits through FHFA or HUD before making program decisions.

  • Assuming FHA and conforming loan limits are the same in every county

    In most moderate-cost counties, the FHA limit is lower than the conforming limit because the FHA floor is set at 65% of the conforming baseline. A borrower who qualifies for both programs may find that FHA cannot accommodate the desired loan amount while a conventional conforming loan can. Checking both limits is essential for accurate program comparison.

  • Believing VA loans still have county-based loan limits for all veterans

    Since 2020, VA loans have no loan limit for veterans with full entitlement. County limits only apply to veterans with reduced or partial entitlement. A veteran who was told years ago that VA loans were capped at the county limit may not realize this restriction was eliminated, potentially missing out on the zero-down benefit for higher-priced properties.

  • Pursuing a jumbo loan when a slightly larger down payment would keep the loan within conforming limits

    Jumbo loans carry higher interest rates, stricter underwriting, larger reserve requirements, and more limited lender availability compared to conforming loans. A borrower whose desired loan amount exceeds the conforming limit by a small margin — $5,000 to $20,000 — should strongly consider increasing the down payment to stay within conforming guidelines. The incremental cash outlay is often far less expensive than the cumulative cost difference between jumbo and conforming terms over the life of the loan.

Documents You May Need

  • FHFA loan limit lookup confirming the conforming limit for the specific county where the property is located
  • HUD/FHA loan limit lookup confirming the FHA limit for the property's county
  • VA Certificate of Eligibility showing the veteran's remaining entitlement status (for VA loan applicants with potential partial entitlement)
  • Property appraisal confirming the value relative to the applicable loan limit
  • Loan estimate from the lender showing the specific loan amount relative to conforming and FHA limits for the county

Frequently Asked Questions

How often do conforming loan limits change?
Conforming loan limits are recalculated annually by the FHFA and take effect on January 1 of each year. FHFA typically announces the new limits in late November. The adjustment is based on the change in national average home prices as measured by the FHFA House Price Index. Limits can increase but are prevented by statute from decreasing, even if home prices decline.
What is the difference between a high-balance conforming loan and a jumbo loan?
A high-balance (or super conforming) loan is a loan that exceeds the baseline conforming limit but falls within the high-cost area ceiling for the specific county. High-balance loans are still purchased by Fannie Mae and Freddie Mac and follow standard agency underwriting guidelines, though they may carry slightly higher rates. A jumbo loan exceeds the conforming limit (including any high-cost area adjustment) and is not eligible for agency purchase. Jumbo loans are subject to individual lender underwriting criteria and typically have stricter requirements.
Can I use an FHA loan if the home price is above the FHA limit for my county?
You can use an FHA loan if the loan amount (after the down payment) is at or below the FHA limit. If the home price is $550,000 and the FHA limit is $524,225, you would need a down payment of at least $25,775 to bring the loan amount to the FHA maximum. However, if the required down payment exceeds your budget, you would need to use a conventional loan or other program that allows a higher loan amount within its limits.
Do loan limits apply to refinances as well as purchases?
Yes. Conforming and FHA loan limits apply to both purchase and refinance transactions. A borrower refinancing an existing loan must ensure the new loan amount falls within the current year's limit for the county. If the existing loan balance exceeds the current conforming limit (for example, if the loan was originated during a period with higher limits or through a prior jumbo product), the refinance may need to be processed as a jumbo loan unless the borrower pays down the balance to within conforming limits.
Are there separate loan limits for investment properties?
No. Conforming and FHA loan limits are based on the property's unit count and county location, not on the occupancy type. The same conforming limit applies whether the property is a primary residence, second home, or investment property. However, investment properties have different down payment, reserve, and pricing requirements that may limit the practical loan amount well below the conforming limit, and FHA loans are not available for investment properties (with the exception of owner-occupied 2-4 unit properties where the borrower occupies one unit).
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