Buying your first home or your next investment property just got a little easier—and potentially less expensive—thanks to the Federal Housing Finance Agency (FHFA)’s updated conforming loan limits for 2025.
A conforming loan adheres to the guidelines set by Fannie Mae and Freddie Mac, government-sponsored enterprises created to purchase mortgages from lenders. By doing so, they free up lenders’ capital to make more loans, enabling more people to afford homes. Conforming loans are often the preferred choice for homebuyers because they typically offer less stringent qualifying standards and lower interest rates than other loan types.
For counties like San Francisco, San Mateo, and Santa Clara, loans between $806,500 and $1,209,750 for a single-unit property are categorized as high-balance conforming loans. While these loans may have slightly higher interest rates and stricter qualifying criteria than low-balance conforming loans (under $806,500), they still provide significant advantages.
Key Benefits of Conforming Loans:
- Low-Balance Loans (≤ $806,500):
- Lower interest rates and monthly payments.
- Minimum down payment of just 3%, and the entire amount can be gifted.
- High-Balance Loans ($806,500–$1,209,750):
- Competitive interest rates compared to jumbo loans.
- Minimum down payment of 5%, with the entire amount eligible to be gifted.
If you’re able to structure your loan under the low-balance limit, you’ll enjoy even more favorable terms, including lower interest rates and payments.
To find the conforming loan limit in your specific area, visit the FHFA’s interactive map: Conforming Loan Limit Map.
Whether you’re planning to buy your first home, upgrade, or invest, these new limits could be a game-changer for your financing options. Let’s discuss how this update can work to your advantage. Contact me today to explore your options and make the most of these new loan limits!
