Breaking: FHA loan limits are increasing for 2025
The Federal Housing Administration (FHA) offers a type of mortgage designed to expand homeownership availability to more buyers. That goal has been put to the test recently, as home prices have risen, increasing 3.0% from September of 2023 to September of 2024. Which is why the FHA has announced that they are raising their loan limits for next year.
The new baseline limit for single-family homes will be $524,225 in 2025, which will help borrowers find more homes within their budget this year. In high-cost areas of the country, the new baseline limit will increase from $1,149,825 to $1,209,750.
What does this mean?
Starting January 1st, you may be able to get an FHA-insured mortgage for up to $1,209,750 for a single-unit property in certain high-cost areas.
Eligible borrowers will be able to qualify for a larger loan under the favorable terms offered by an FHA loan. These include:
- Low down payment options available, as low as 3.5% or purchase price
- Lower rates than conventional loans for some options
- More loan options available for first-time homebuyers
- Minimum credit scores to be approved are generally lower
- Higher debt-to-income ratios
- Allows for 100% of down payment and closing costs in the form of gift funds
What are the updated loan limits?
The loan limits that the FHA is updating are different depending on which part of the country the home is in and how many units are in the building being purchased.
| Low-Cost Area | High-Cost Area |
1 Unit | $524,225 | $1,209,750 |
2 Units | $671,200 | $1,548,975 |
3 Units | $811,275 | $1,872,225 |
4 Units | $1,008,300 | $2,326,875 |
Contact a Guaranteed Rate Affinity loan officer to see how much money you could borrow under these new limits today.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate Affinity for current rates and for more information.
Guaranteed Rate, Inc. d/b/a Rate is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture, the Federal Housing Administration or any other government agency.