FHA Loan Limit Increase: The Federal Housing Authority (FHA) announced new loan limit ranges for 2024. The new baseline is $498,257.
Homeowners who are planning to use an FHA loan for their next home purchase or refinance can expand their price range by more than $25,000 for 2025, thanks to a substantial loan limit increase.
On November 26, the Federal Housing Authority (FHA) announced new loan limits for 2025 that are substantially higher than 2024’s. Beginning January 1, the loan limit floor for FHA loans will be set at $524,225 for single-family homes — up from $498,257 — for areas where 115% of the median home price is less than this limit. That covers most of the U.S.
The 2025 maximum, known as the FHA loan limit “ceiling,” is set at $1,209,750 for single-family homes. That’s 150% of the national conforming loan limit, and it’s up more than $50,000 from 2024’s $1,149,825 mark. This ceiling is the maximum amount a homebuyer can borrow in an FHA loan for a single-family home and is reserved for certain high-cost areas in California, Colorado, New Jersey, New York, Washington D.C. and isolated counties in the Mountain West.
Updating the loan limits yearly gives homebuyers more housing options after a calendar year of home price growth.
“Today’s announcement of loan limit increases, calculated according to statute, enables the FHA program to keep up with nationwide price appreciation,” Federal Housing Commissioner Julia Gordon said in a press release. “Regular adjustment of loan limits ensures that FHA financing continues to be available in all markets to all those who rely on our programs to access homeownership.”
The FHA announcement comes just days after the Federal Housing Finance Administration (FHFA) raised the 2025 conforming loan limits by 5.2% to match the robust home price growth in 2024. The FHA sets its loan limits based on the FHFA’s, as required by the National Housing Act. The $524,225 FHA floor is 65% of the FHFA’s baseline limit of $806,500 set for loans backed by Fannie Mae and Freddie Mac. This limit applies to most homes in the U.S. in more than 3,000 counties.
The FHA also set new limits for multi-family properties and “special exception” areas, where the cost of construction is substantially higher. These areas include Alaska, Hawaii, Guam and the U.S. Virgin Islands.
In certain cases, homebuyers will be eligible to borrow more than $3.3 million to buy a four-unit home in a special exception area like Alaska or Hawaii.
Single-Unit:
Two-Unit:
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Four-unit:
The FHA also announced that that the single-unit ceiling of $1,149,825 as the maximum amount for Home Equity Conversion Mortgages (HECM), better known as reverse mortgages. This limit does not vary by county but remains the same throughout the country.
Home prices increased by between 3-4% in 2024, according to CoreLogic year-over-year sales data from the last several months. If not for increased loan limits, some buyers may have been out of the home-buying market next year.
The 2024 maximum FHA loan amount in much of the country last year was $498,257. This dollar amount unfortunately does not go as far as it used to. In places like Maine, Connecticut and New Jersey, home price growth may have been as high as 10% in 2023, according to the same data from CoreLogic.
Many industry analysts expect competition for homes to be fierce again as economic indicators like mortgage rates continue to shift. That competition will be especially fierce for homes in more affordable price ranges. The new loan limit of $524,225 should give homebuyer seeking FHA loans more power when bidding for homes.
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