The U.S. Department of Housing and Urban Development (HUD) has announced an increase in loan limits for the Federal Housing Administration's (FHA) Single Family Title II forward and Home Equity Conversion Mortgage (HECM) programs for 2025. This change is attributed to the continued rise in home prices across much of the country.
According to HUD, the FHA is required by the National Housing Act (NHA) to update its annual loan limits using a formula based on county or Metropolitan Statistical Area home sale data. The formula determines new loan limits for three cost categories as established by law. The NHA mandates that FHA sets its floor and ceiling loan limits according to the national conforming loan limit set by the Federal Housing Finance Agency for conventional mortgages held by Fannie Mae and Freddie Mac.
Federal Housing Commissioner Julia Gordon commented on this development, stating: "Today’s announcement of loan limit increases, calculated according to statute, enables the FHA program to keep up with nationwide price appreciation." She added that these adjustments ensure that FHA financing remains available in all markets.
The new forward mortgage loan limits will be effective for FHA case numbers assigned from January 1, 2025. Notably, maximum loan limits will increase in 3,151 counties. The property size dictates different low-cost area "floor" and high-cost area "ceiling" values, with special exceptions made for Alaska, Hawaii, Guam, and the U.S. Virgin Islands due to higher construction costs.
For one-unit properties in low-cost areas, the floor is set at $524,225 while high-cost areas have a ceiling of $1,209,750. In contrast, these ceilings reach $1,814,625 in special exception areas like Alaska and Hawaii.
In terms of HECM loans—the maximum claim amount will rise from $1,149,825 in 2024 to $1,209,750 starting January 1st next year. This applies universally across all regions including those under special exception status.
Further details about specific regional limits can be accessed via FHA's Loan Limits Page online.
