How new government-backed mortgage limits affect homebuyers in 2025

The annual increase can provide more purchasing power for homebuyers

For aspiring homeowners, any increase in buying power can prove beneficial. That’s why each fall, the announcement of new limits on government-backed mortgage loans is closely watched to see if there will be an increase and at what scale.

For 2025, the Federal Housing Finance Agency (FHFA) and Federal Housing Agency’s (FHA) raised borrowing limits by more than 5% for conforming loans and FHA loans – some of the most popular government-backed mortgage products.

This year, homebuyers using an FHA loan can borrow up to $524,225 in most parts of the country and up to $1,209,750 in high-cost areas.

This loan type is especially popular with first-time homebuyers because it can offer consistent rates, low down payment requirements and flexible qualification guidelines. FHA loans can also be combined with down payment assistance programs.

“Each year, federal agencies adjust these borrowing limits to account for rising home prices, which in turn may help buyers maintain some buying power,” said Fred Bolstad, head of retail home lending for U.S. Bank. “For first-time homebuyers, an FHA loan is a great option because it can offer benefits to help buyers overcome the common thresholds to buying – which is most often the down payment.”

Homebuyers using a fixed rate conforming loan in 2025 can borrow up to $806,500 in most parts of the country and up to $1,209,750 in high-cost areas. If a buyer needs to borrow more than $806,500, a jumbo loan may be recommended.

Learn more about mortgage options for homebuying needs at the bank's Mortgage Loans page.