Freddie Mac, Fannie Mae backing bigger home loans in 2025

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The Corcoran Group founder Barbara Corcoran argues that a massive mortgage rate drop would be ‘tremendous’ for the markets during an appearance on ‘Cavuto: Coast to Coast.’

The Federal Housing Finance Agency (FHFA) announced Tuesday it is raising the loan amount limits for mortgages purchased by Freddie Mac and Fannie Mae by 5.2% in 2025, as home prices continue to soar in the U.S.

The new conforming loan limit (CLL) value for a one-unit home will be $806,500 next year, an increase of nearly $40,000 from the 2024 baseline cap.

FHFA announced it will raise loan limits for mortgages purchased by Fannie Mae and Freddie Mac by 5.2% in 2025. (Justin Sullivan/Getty Images / Getty Images)

However, in high-cost areas of the country where 115% of the local median home value exceeds the baseline loan limit, the loan ceiling is 150% higher. So, the loan cap for a single-unit home in those areas will be $1,209,750, which is 150% of $806,500, FHFA said.

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The FHFA adjusts loan limits for government-sponsored enterprises Freddie and Fannie on an annual basis to reflect changes in the average home price, which climbed 5.21% from the third quarter of 2023 to the same quarter this year.

Bahnsen Group managing partner David Bahnsen discusses market volatility and analyzes the real estate market on 'The Big Money Show.'

Home prices have surged in the U.S. in recent years, along with mortgage rates, causing a sustained affordability crisis in housing.

Freddie Mac's latest Primary Mortgage Market Survey, released last Thursday, showed that the average rate on the benchmark 30-year fixed mortgage rose to 6.84% from last week's reading of 6.78%. The