The Federal Housing Administration (FHA) issued its 2025 California FHA loan limits, and the good news for homeowners is that they’ve increased their limits for most areas. The FHA increase in loan limit size is a big win for homeowners, as it will open the door to additional opportunities for many current and potential homeowners. Getting an FHA mortgage has never been easier.
Key Topics In This Article: Loan Limit | High-Cost Counties | Previous Years | Is An FHA Loan Right For You?
2025 FHA Loan Limits In California
Here are the baseline and high-cost county California FHA loan limits.
- $524,225 (baseline), most counties
- Up to $1,209,750 in some high-cost counties
The 2025 California FHA loan limit increase will allow more homeowners to access the FHA loan program. These limits apply to purchase and refinance transactions throughout California.
FHA Nationwide
The FHA loan limit nationwide increased from $498,257 to $524,225, an increase of nearly $26,000. In high-cost areas, it increased from $1,149,825 to $1,209,750, an increase of almost $60,000.
This increase will allow homeowners new opportunities and should help keep housing stable. Multi-decade high mortgage rates did not deter home prices from increasing; if rates improve in 2025, that trend of higher home values may continue.
The most popular Federal Housing Administration loan program is the 30-year fixed-rate loan program, which will continue to be offered in 2025.
Why the increase?
According to the Federal Housing Finance Agency (FHFA) the price index, the price of homes continues to rise. Every year, FHFA announces an update to loan limits; some years, it increases, and some years, it remains flat.
If you’d like a county-by-county breakdown (for each state), then check out the easy-to-use search function on HUD’s website. Before raising the FHA loan limits, the Federal Housing Finance Agency raised conforming loan limits across the country to $766,550. That is a sizable increase, and it ultimately will help thousands of homeowners throughout California.
FHA Loan Limits High-Cost Counties
If you live in one of the high-cost counties and want an FHA loan amount between $498,257 and $1,149,825, you are going to pay a higher interest rate than someone who has a loan amount at or below $498,257. The process and general qualifications are the same, but the interest rate is higher.
How Much Higher?
It mostly depends on the market, but generally speaking, your interest rate is going to be between 0.125% and 0.375% higher than those with a loan amount at or below $524,225.
As reported in the news, housing prices have significantly jumped over the last 12 months, and because of this, FHA is able to raise its floor and ceiling loan limits.
California FHA Loan Limits For Previous Years
Below are the FHA loan limits in California from 2018 to 2024.
2024 FHA loan limits in California
- $498,257 (baseline limit)
- $1,149,825 (high-cost counties)
2023 FHA loan limits in California
- $472,030 (baseline limit)
- $970,800 (high-cost counties)
2022 FHA loan limits in California
- $420,680 (baseline limit)
- $970,800 (high-cost counties)
2021 FHA loan limits in California
- $356,360 (baseline limit)
- $822,375 (high-cost counties)
2020 FHA loan limits in California
- $331,760 (baseline limit)
- $765,600 (high-cost counties)
2019 FHA loan limits in California
- $314,827 (baseline limit)
- $726,525 (high-cost counties)
2018 FHA loan limits in California
- $294,515 (baseline limit)
- $679,650 (high-cost counties)
Is An FHA Loan Right For You?
An FHA loan is not for everyone; however, it does provide an opportunity for thousands of Californians every year to either refinance their current mortgage or purchase a new home.
FHA loan programs typically come with lower rates (compared to conforming loan programs); however, they do come with Mortgage Insurance (MI). More on what Mortgage Insurance is below.
Mortgage Insurance
Do you know FHA loans come with Mortgage Insurance?
Mortgage Insurance (MI) is not homeowners’ insurance. Mortgage Insurance is an insurance policy that you pay each month (along with your mortgage payment, property taxes, and property insurance) that protects the lender in case you default on your loan.
While no one wants to pay an extra payment each month, the FHA loan program does open the door to new opportunities for those with less-than-perfect credit, high debt-to-income ratios, and/or low down payments.
The program is not perfect, but it is great for certain current and potential homeowners. All FHA loan limits in California, standard and high cost, are subject to Mortgage Insurance – no exceptions.
There is also an Upfront Mortgage Insurance Premium that is paid at the time of closing. The payment is one lump sum and is either added to the loan, or the interest rate is increased to cover the cost.
Paying Off An FHA Loan
When you go to pay off an FHA loan under the old FHA loan limits in California and the new limits for 2021, you’ll owe daily interest. Unlike conforming loans, you’ll owe daily interest for the entire month, no matter what day you close. You’ll only owe interest for conforming loans on the day your loan is paid off.
So, if you are selling your home or refinancing your current mortgage and you have an FHA loan, you’ll want to close and pay the original FHA mortgage at the end of the month (rather than the first few weeks).
FHA Streamline Refinance
One of the best refinance options is the FHA Streamline Refinance loan program. If your current mortgage is an FHA loan, then you’ve met the main requirement for the program. No appraisal, no income documentation, and a super-fast closing. You can also refinance if you owe more than the home is worth.
VA mortgage loans have a similar program. The VA Streamline Refinance allows a veteran, active service member, or surviving spouse the opportunity to refinance their current VA loan at a lower rate without an appraisal.
Bottom Line On FHA Loan Limits In California
FHA home loans are not for everyone, but are a great option for most California home buyers and homeowners. FHA loan limits in California generally increase yearly due to the increase in home values throughout California.