When planning to buy a home or refinance an existing mortgage, understanding the loan limits in your area is critical. Conventional loan limits determine the maximum amount you can borrow through standard mortgage programs backed by Fannie Mae and Freddie Mac. These limits vary significantly based on location, primarily due to differences in local real estate markets.
In this article, we’ll focus on the conventional loan limits for New York and Chicago in 2025 — two major U.S. metropolitan areas with dynamic housing markets. We’ll explain what conventional loan limits mean, how they are set, their impact on buyers and refinancers, and why knowing these limits can save you money and stress.
What Are Conventional Loan Limits?
Conventional loans are mortgages that meet guidelines set by government-sponsored enterprises (GSEs) — mainly Fannie Mae and Freddie Mac. These loans are not insured or guaranteed by the federal government but follow specific rules for credit, income, and loan size.
Loan limits refer to the maximum mortgage amount eligible for purchase by Fannie Mae and Freddie Mac. Loans above these limits are classified as jumbo loans and have different underwriting requirements and often higher interest rates.
The loan limits are determined annually by the Federal Housing Finance Agency (FHFA) and are based on the local median home prices, housing cost variations, and federal regulations.
How Are Conventional Loan Limits Set?
The FHFA reviews and publishes conforming loan limits each year. These limits reflect:
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Local Median Home Prices: Higher median prices translate to higher loan limits.
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National Baseline Limit: A floor amount that applies to most counties, adjusted upwards in high-cost areas.
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High-Cost Area Designation: Areas with expensive real estate markets get elevated loan limits.
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Regulatory Framework: Federal law governs maximum allowable loan limits to ensure market stability.
2025 Baseline Conventional Loan Limit Overview
For most U.S. counties in 2025, the baseline conforming loan limit for a single-family home is:
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$726,200
However, for high-cost areas, this limit can be significantly higher, reaching:
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Up to $1,089,300
Conventional Loan Limits for New York in 2025
Why New York Has High Loan Limits
New York City and many surrounding counties are among the most expensive housing markets in the country. The real estate prices reflect demand, limited supply, and the economic importance of the region.
Thus, New York’s loan limits are among the highest to accommodate the elevated home values.
2025 Conventional Loan Limits in New York City and Surrounding Areas
| County | 2025 Conforming Loan Limit (Single-Family) |
|---|---|
| New York County (Manhattan) | $1,089,300 |
| Kings County (Brooklyn) | $1,089,300 |
| Queens County | $1,089,300 |
| Bronx County | $1,089,300 |
| Richmond County (Staten Island) | $1,089,300 |
| Westchester County | $1,089,300 |
| Nassau County | $1,089,300 |
| Suffolk County | $1,089,300 |
Multi-Family and Other Property Loan Limits in New York
For 2-4 unit properties, the limits increase accordingly, for example:
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2-unit properties: Approx. $1,394,775
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3-unit properties: Approx. $1,685,850
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4-unit properties: Approx. $2,089,050
This higher limit reflects the increased value and risk of multi-family investments.
Conventional Loan Limits for Chicago in 2025
Chicago’s Housing Market Overview
Chicago’s real estate market is moderately priced compared to New York but still significantly higher than many other regions. The city’s diverse neighborhoods feature everything from luxury condos downtown to more affordable suburban homes.
2025 Conventional Loan Limits in Chicago (Cook County and Nearby)
| County | 2025 Conforming Loan Limit (Single-Family) |
|---|---|
| Cook County | $726,200 |
| DuPage County | $726,200 |
| Lake County | $726,200 |
| Will County | $726,200 |
| Kane County | $726,200 |
Chicago’s conforming loan limit aligns with the baseline $726,200 because it is not classified as a high-cost area by the FHFA, unlike New York.
Multi-Family and Other Properties Limits in Chicago
Similarly, loan limits increase with property units:
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2-unit properties: Approx. $930,300
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3-unit properties: Approx. $1,123,900
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4-unit properties: Approx. $1,392,500
Why Do These Limits Matter?
1. Loan Qualification and Interest Rates
Loans under the conforming limits qualify for purchase by Fannie Mae and Freddie Mac, which typically means:
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Lower interest rates compared to jumbo loans
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More favorable loan terms and lower fees
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Easier underwriting and faster processing
2. Impact on Down Payments and Mortgage Insurance
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If your loan is below the limit, you may be eligible for lower down payments (as low as 3%) and possibly avoid private mortgage insurance (PMI) in certain cases.
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Above the limit means jumbo loans, requiring higher down payments and stricter qualification.
3. Refinancing Options
Conforming loan limits influence refinancing eligibility, particularly for government-backed refinance programs that require loans to be within conforming limits.
What Happens If You Need a Loan Above the Limit?
When the loan amount exceeds the conventional limit for your area:
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You must apply for a jumbo loan.
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Jumbo loans often require higher credit scores, larger down payments (often 20%+), and stricter income documentation.
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Interest rates can be higher, increasing your monthly payments.
Factors Influencing Loan Limits in New York and Chicago
Housing Market Trends
Rapid increases or declines in median home prices can trigger adjustments in loan limits. For example, rising real estate prices in New York can push loan limits higher.
Economic Factors
Job market, inflation, and regional economic health also influence housing costs and limits.
Government Policies
The FHFA’s guidelines and government housing policies impact how loan limits are set annually.
How to Use This Information When Buying or Refinancing
For Buyers in New York
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Understand the high loan limits but also prepare for competitive market conditions.
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If purchasing a home near or above the $1 million mark, conventional loans may still apply, offering better rates than jumbo loans.
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Prepare your credit and financial documents carefully for smooth approval.
For Buyers in Chicago
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With limits at $726,200, most median-priced homes qualify for conventional loans.
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Buyers targeting luxury or high-value homes might face jumbo loan scenarios, necessitating higher qualifications.
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Leverage conventional loan benefits by staying within limits when possible.
For Refinancers
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Knowing loan limits helps determine if you qualify for streamlined refinancing programs like Fannie Mae’s High Balance Refinance Option or Freddie Mac’s Refinance Plus.
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Refinancing a loan above the limits might require jumbo refinancing, which can be more costly.
Tips for Navigating Conventional Loan Limits in 2025
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Check Your County’s Loan Limit Before Applying: Limits differ widely even within metro areas.
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Shop for Lenders Familiar with Local Limits: They can help structure loans optimally.
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Consider a Larger Down Payment if You’re Near the Limit: To avoid jumbo loans and secure better rates.
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Keep an Eye on Market Changes: Loan limits adjust annually; stay informed before buying or refinancing.
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Work on Credit and Income Stability: Both matter more as loan sizes approach limits.
Conclusion
Understanding conventional loan limits in New York and Chicago is crucial for anyone planning to buy or refinance a home in 2025. New York’s higher loan limits accommodate its expensive housing market, while Chicago’s limits reflect more moderate home prices. Knowing these limits can help you plan your financing strategy to take advantage of lower interest rates, reduced fees, and easier approvals.
If your loan amount exceeds these limits, be prepared for jumbo loan requirements, which come with stricter qualifications and potentially higher costs. Always consult with a mortgage professional to navigate these options effectively.
