Understanding FHA and Conventional Loan Limits and Why They Matter

Every homebuyer eventually runs into the same question: how much can I actually borrow without jumping into jumbo territory? That’s where loan limits come in. They aren’t just numbers on a chart from Washington—they define the line between conforming conventional mortgages (the loans that Fannie Mae and Freddie Mac will buy) and jumbo loans (the ones that live outside that safety net).

Why does this matter? Because the type of loan you get shapes everything: your interest rate, your down payment, and how picky an underwriter will be with your file. Loan limits are updated every year to reflect housing market changes, and in 2025 they climbed again—giving buyers a little more breathing room in a market that hasn’t been known for generosity.

In this guide, we’ll break down the difference between conforming conventional and FHA loan limits, show you how they vary by state and county, and explain how they directly affect your buying power. We’ll look closely at places like Santa Clara and Los Angeles in California, Travis County in Texas, Palm Beach in Florida, and high-cost counties in North Carolina, New Jersey, and Connecticut. And most importantly, we’ll cover what to do if your dream home’s price tag runs past the limit.

With the right strategy, loan limits don’t shut doors—they help you figure out the smartest way to walk through them.

Conforming Conventional vs. FHA Loan Limits

There are two main types of government-influenced limits: Conforming Conventional Loan Limits (set by the FHFA) and FHA Loan Limits (set by HUD).

• Conforming conventional limits apply to mortgages that Fannie Mae or Freddie Mac can purchase. For 2025, the national baseline conforming conventional limit for a single-family home is $806,500 in most of the country. In high-cost areas, it goes up to $1,209,750. These values rose about 5.2% from 2024, reflecting higher home prices.

• FHA limits are set separately but tied to conforming conventional numbers. FHA establishes a floor (65% of the conforming baseline) and a ceiling (150% of the baseline). For 2025, that means a floor of about $524,225 and a ceiling of $1,209,750. Counties in between use 115% of local median home prices as their cap. FHA also scales limits up for duplexes, triplexes, and four-units.

2025 Loan Limits – A Quick Overview

• Conforming conventional baseline (1-unit): $806,500

• Conforming conventional ceiling (1-unit, high-cost): $1,209,750

• FHA floor (1-unit): $524,225

• FHA ceiling (1-unit, high-cost): $1,209,750

The takeaway: these limits define whether your loan is considered conforming conventional or jumbo. Conforming conventional loans generally come with lower rates, lower down payments, and easier qualifying standards. Jumbo loans usually require more cash, more reserves, and stronger credit.

Standard vs. High-Cost Areas: State-by-State Examples

Loan limits don’t apply evenly across the country. Some places qualify as “baseline” markets where the national conforming conventional limit applies, while others are considered high-cost and get expanded room. These variations matter—especially if you’re shopping in coastal metros, luxury corridors, or rural counties where limits diverge. Let’s look at a few examples in key states where LendFriend lends.

California (Big Differences Depending on The County)

Both Santa Clara and Los Angeles Counties hit the maximum $1,209,750 limit for one-unit homes. FHA mirrors that ceiling. Compare that to rural Alpine County, where the conforming conventional cap stays at $806,500 and FHA drops to $524,225. California showcases the extremes: sky-high ceilings in Silicon Valley and LA, baseline in rural counties.

Napa County has a 2025 high-balance conforming conventional loan limit of $1,017,750, reflecting its expensive wine-country market. The standard conforming conventional cap there remains $806,500, but buyers often focus on the higher threshold when planning purchases.

Sonoma County’s 2025 high-balance conforming conventional loan limit is $897,000, compared to the baseline $806,500. That puts Sonoma just below the ultra-high-cost ceiling, but still well above the national baseline—illustrating how limits vary widely even within California.

San Diego County’s 2025 high-balance conforming conventional loan limit is $1,006,250, while the low-balance limit remains $806,500. This positions San Diego as a major metro that doesn’t quite reach the ceiling like LA or Santa Clara, but still gives buyers significantly more room than baseline counties.

Texas (Statewide)

Texas is straightforward: every county sits at the $806,500 conforming conventional limit. FHA varies slightly—Travis County (Austin) allows $571,550, while Harris County (Houston) stays at the floor $524,225. Across the board, if you need to borrow more than $806,500 in Texas, you’re looking at a jumbo.

Florida (Statewide vs. Keys)

Most Florida counties sit at $806,500. The exception: Monroe County (Florida Keys), where the conforming conventional cap is $967,150 thanks to sky-high coastal prices. FHA limits in Miami-Dade, Broward, and Palm Beach are in the $650k range, while Monroe pushes to $967,150.

North Carolina (Charlotte/Raleigh vs. Outer Banks)

NC’s conforming conventional loan limit is $806,500 across the state. FHA limits swing with local prices: Charlotte (Mecklenburg County) is $524,225, Raleigh (Wake County) $530,150, but Dare County (Outer Banks) reaches $663,550. Coastal and resort counties often come in higher than inland metro areas.

New Jersey (Bergen/Hudson vs. Warren)

Northern NJ counties like Bergen, Essex, and Hudson hit the $1,209,750 ceiling for conforming conventional loans. FHA matches. But Warren, Salem, and Cumberland Counties remain at the baseline $806,500. This gives NJ buyers a wide range depending on whether you’re closer to New York City or live in rural areas.

Connecticut (Fairfield vs. Rest)

Fairfield County is CT’s standout, with a conforming conventional (and FHA) limit of $851,000. Every other county sticks with the baseline $806,500. That reflects Fairfield’s higher housing costs near New York since the county includes Greenwich, Westport, and other affluent communities that consistently push median prices higher. Buyers in Fairfield often face competition from New York commuters, which makes the higher cap particularly useful. In contrast, counties like Hartford or New Haven stay at the baseline, offering a clearer separation between Connecticut’s luxury corridor and the rest of the state.

How Loan Limits Affect Your Mortgage

• Down Payments: Jumbo loans usually demand at least 10% down, but if you want the best rate it’s a minimum of 20%. Conforming conventional loans, by contrast, can be obtained with as little as 3% down for qualified first-time buyers, though 5% is more common for repeat buyers. Putting 20% down on a conforming conventional loan eliminates private mortgage insurance (PMI) entirely and usually secures a better rate. FHA loans still require just 3.5% down, though they carry mandatory mortgage insurance premiums. For more on how down payments work and strategies to save, see our Down Payment Guide.

• Interest Rates: Conforming conventional loans typically carry slightly lower rates because they’re easier to sell to investors. Jumbos, considered riskier, may be priced higher—but usually not by much. The typical spread is about a quarter of a percentage point (0.25%). On a $1 million loan, that difference adds up over time, but it’s not a dramatic gap. Market conditions can even flip that spread occasionally, with jumbo rates matching or beating conforming conventional, depending on investor appetite.

• Credit & Reserves: Jumbo loans usually require higher credit scores (often 700+) and bigger cash reserves. Conforming conventional and FHA loans are more forgiving.

• PMI: If you put less than 20% down, you’ll pay PMI on conforming conventional and jumbo loans alike. FHA has its own mortgage insurance premium (MIP). For a deeper dive into how PMI works and strategies to avoid it, see our Ins and Outs of Private Mortgage Insurance guide.

Strategizing in High-Cost Markets

• Stay under the cap if possible. Even a slightly bigger down payment can keep your loan conforming conventional and save money long-term. You can even add a second mortgage to make up the difference if you need a little extra loan amount to buy the house. For example, imagine a buyer at the conforming conventional limit of $806,500 who wants to purchase a $1.1 million home with 10% down. That leaves a loan amount of roughly $990,000—too high for conforming conventional. One option is to take a first mortgage at $806,500 and add a second mortgage for the remaining ~$183,500. This way, the first loan stays conforming conventional, while the smaller second mortgage fills the gap. The alternative would be to take the entire $990,000 as a jumbo loan.

  Explore jumbo products. Today’s jumbo market offers more options—some as low as 5% down. Always shop around.

• Think multi-unit. FHA allows 2–4 unit purchases with higher loan limits. Buying a duplex could stretch your budget further. In fact, many buyers use this as a house hacking strategy—living in one unit while renting out the others to offset their mortgage. For more, check out our House Hacking 101 guide.

• Leverage points or buydowns. A small rate drop makes a big difference on a large loan balance. Temporary buydowns can be a smart tool for conforming conventional and FHA loans, but they are generally not available on jumbo mortgages. To learn more, see our Temporary Mortgage Buydown Guide.

Checking Your Local Loan Limits

Before making an offer, check the exact loan limits for your county:

• Conforming conventional limits: FHFA Loan Limit Lookup Tool

• FHA limits: HUD Mortgage Limits Search

Knowing your local cap can guide your budget and strategy. Or, let us do the math. At LendFriend, we can run scenarios and suggest the best path for your situation—whether that’s staying conforming conventional or exploring jumbo options.

Check our resources:

• Jumbo Loans vs. Conventional

• Homebuying Guide

• Jumbo Loans

Bottom Line: Loan Limits Aren’t Barriers, They’re Tools

Loan limits define the line between conforming conventional and jumbo—but they aren’t designed to hold you back. They exist to keep financing accessible and stable. With conforming conventional limits rising again in 2025, buyers have more room than ever before to finance homes without going jumbo. And even if your price point does push you into jumbo territory, there are plenty of smart strategies to make it work.

At LendFriend, we help you turn these numbers into a plan. Because owning a home isn’t about memorizing federal caps—it’s about using them to your advantage.