FHFA Raises 2025 Loan Limits: Boost for California’s High-Cost Housing Markets
The Federal Housing Finance Agency (FHFA) has announced that the conforming loan limit (CLL) for one-unit properties will increase to $806,500 in 2025, marking a 5.2% rise from the 2024 limit. This adjustment reflects the 5.21% increase in average U.S. home values between the third quarters of 2023 and 2024, as indicated by the FHFA House Price Index.
In high-cost areas, where 115% of the local median home value surpasses the baseline CLL, the loan limit will be higher, with a new ceiling of $1,209,750 for one-unit properties. In California’s high-cost areas, such as parts of the Bay Area, Los Angeles, and Orange County, the increased conforming loan limit for 2025 will help more homebuyers access government-backed mortgages. The new ceiling of $1,209,750 for one-unit properties allows buyers in these regions to secure financing without resorting to jumbo loans, which often come with higher interest rates and stricter qualification criteria. This adjustment reflects the state’s consistently high home prices and provides greater affordability options for those navigating California’s competitive real estate market. It is expected to benefit middle-income borrowers, particularly first-time homebuyers, by expanding access to loans under more favorable terms.
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