Conventional Home Limits for 2025

Understanding your mortgage goes beyond calculating your payment and reviewing the terms of your loan. Monthly payments and interest rates aside, the first step is understanding what kind of loan you’ll need to secure for the specific home you want to purchase. If you are seeking a conventional or conforming loan, you will have to find a home that falls within set loan limits for your area. Of course, you will also need to understand down payment requirements and how the cost of living might impact loan limits.

 

What are Conventional Loan Limits for 2025?

Conventional Loans are mortgage loans that are not guaranteed or insured by the federal government under programs offered by agencies like the Department of Veterans Affairs, the Department of Agriculture, or the Federal Housing Administration. These Conventional Loans are confined to set limits, which must also stay within conforming loan limits and are determined by The Federal Housing Finance Agency (FHFA). Each year, FHFA evaluates and updates baseline loan limits based on its House Price Index report, which shows how much housing prices increased during the year.

For 2025, the Conventional Loan Limit for single-family homes is $766,550 in most areas. Some higher-cost areas, like larger cities, have higher limits. These limits are set individually per County, and you can view your local Conventional Loan limits with this search tool.

• Conventional Loan limit for most areas: $766,550
• The entire State of Michigan: $766,550
• High-cost metropolitan areas: up to $1,149,825

Separate from Conforming Loans, FHA loans (which typically have more flexible requirements) also have maximum loan limits.

• FHA limit: $498,257
• FHA limit is high-cost areas: $1,149,825

*Limits and figures are subject to change at any time. For the most recent figures, contact a licensed loan officer.

 

What are Conforming Loans?

A Conforming Loan is a mortgage from a private lender which meets industry standards for safe lending.

All Conforming Loans fall within the FHFA’s dollar limits while simultaneously meeting the funding criteria of Freddie Mac and Fannie Mae, which two government-sponsored agencies who set those safe lending standards industry-wide.

 

Do you Still Need 20% Down for Conventional Home Loans
in Michigan?

Conforming Conventional Loans require a minimum of 3% down payment — not 20%. If you’re looking to secure a Conventional Loan, you will need a good credit score (most lenders will require a minimum score of 620 to issue these loans) and a sufficient down payment of at least 3% of your purchase price. Loans with a down payment of less than 20% will fall subject to Private Mortgage Insurance (PMI), increasing the buyer’s monthly mortgage payment, making a home with a 20% down payment more cost-effective.

Even with a minimum down payment of 3%, Treadstone has down payment assistance programs that can help bring your down payment lower — in some cases, a zero down payment is achievable! *

 

Do Limits Increase if the Area has a Higher Cost of Living?

Because loan limits are determined by the cost of living, individuals looking to buy a home in a more expensive area might see higher loan limits. Home values vary vastly between states, so enacting a uniform limit for every area isn’t a reliable method. Because loan limits are determined by the median home value in a specific area, places with a higher cost of living might see higher limits, up to 150% of the baseline Conforming Loan limit.

 

What if You Plan to Borrow More than the Loan Limit?

Home buyers interested in securing a loan that exceeds the standard conforming limit for their area can seek non-conforming, non-conventional Jumbo Loans. These loans are typically offered with fixed or adjustable interest rates and will feature different terms than conventional loans.

 

Get Pre-Approved for Your Mortgage Payment!

Take the guesswork out of your home-buying equation. At Treadstone, we offer personalized service to focus on your individual needs. We will work with you to find the mortgage solution that best fits your financial needs, using our deep-rooted understanding of mortgage products and today’s real estate climate. Connect with us today to get pre-approved for your mortgage!

Our Loan Officers are experts with both Conforming and Non-Conforming Loans. We can help navigate those options.

*Terms and qualification are subject to underwriting approval and can change without notice.  Not all borrowers may qualify.  Example figures are for illustrative purposes only.

 

Frequently Asked Questions

What is the limit for Conventional Home Loans?

The limit for conventional loans in most areas is $766,550 for 2025. In places with a higher cost of living and more expensive median home price, the limits might be higher. These limits exist because conventional loans follow the guidelines of conforming loans, which are also regulated by loan limits to cap lending.

 

What is the limit for Conventional Loans in Michigan?

In Michigan, the maximum lending amount is $766,550. This remains the same for every county and every city throughout the state.

 

What will the limits be in 2025?

Standard conventional and conforming loan limits for 2025 are set at $766,550 for single-family homes, although borrowers in more expensive areas might see higher loan limits in place.

 

Do Conventional Loans require 20% down?

Conventional Loans do not always require 20% down. Depending on your financial profile and the property you buy, the down payment for a conventional loan can range between 3% and 20%. However, borrowers who provide a down payment lower than 20% will be required to pay PMI, which will raise the monthly mortgage payment.