The conforming loan-limit values for residential mortgages acquired by Fannie Mae and Freddie Mac in 2025 have been set at $806,500 for one-unit properties – an increase of $39,950 or 5.2% from 2024 – and $1,209,750 for one-unit properties in high-cost areas (which is 150% of $806,500), as per the Federal Housing Finance Agency (FHFA).
“[The] FHFA announced today that in 2025, Fannie Mae and Freddie Mac will be able to purchase mortgages of up to $1,209,750 in certain high-cost areas in the United States and $806,500 in the rest of the country,” The Housing Policy Council (HPC) says in a statement. “This continued expansion of federal backing for mortgage finance exacerbates the country’s housing affordability challenges.”
“After a lengthy period where loan limits remained unchanged during and after the Great Financial Crisis, the subsequent rapid rise in house prices has fueled a growth in loan limits that exceeds the growth in household income,” the HPC says in its statement. “As a result, more and more upper-end borrowers have access to federal support for financing mortgages, which puts upward pressure on house prices. At the same time, this growth in federal support in the mortgage market diminishes the remaining portion of the market dependent solely on private capital.”
“As we have warned for the last three years, the question of the appropriate role of the government in the housing finance system has gone unanswered for far too long,” the HPC says. “This latest increase in conforming loan limits is a reminder to the incoming Trump Administration that evaluating the proper role and scope of federal involvement in mortgage finance remains on the policy agenda. The Housing Policy Council urges the 119th Congress and the Trump Administration to take up this question soon.”
The FHFA is required to adjust the loan limits in reaction to home prices, in accordance with the Housing and Economic Recovery Act (HERA).
The FHFA’s home price index report shows that U.S. home prices increased 5.21% on an annual basis as of the end of the third quarter.
Photo: Laurel and Michael Evans