FHFA Addendum (November 2025) — Calculating 2026 Conforming Loan Limit Values Under HERA
FHFA's methodology addendum to the 2026 conforming loan limit announcement: the HERA baseline calculation (FHFA HPI, 3.25735384 percent), high-cost area limits and the national ceiling, the Alaska / Hawaii / Guam / U.S. Virgin Islands exceptions, two- to four-unit limits, and seasoned-loan acquisitions. Full verbatim text.
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Verbatim provisions from FHFA Addendum (November 2025) — Calculating 2026 Conforming Loan Limit Values Under HERA — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — National Baseline
National Baseline The Housing and Economic Recovery Act of 2008 (HERA) requires the U.S. Federal Housing (FHFA) to adjust the baseline conforming loan limit value (CLL) each year to reflect changes in the national average home price. HERA specifies that the Agency “establish and maintain” an index for tracking average home prices for this purpose. In May 2015, FHFA published a Notice and Request for Input announcing its plans for using the nominal, seasonally adjusted, expanded-data House Price Index (HPI) for this purpose.1 Based upon generally favorable feedback to the announcement, FHFA published a Final Notice in October 2015 stating that it would follow that plan.2 In determining the 2026 CLL baseline value, FHFA used the nominal, seasonally adjusted, expanded-data HPI to calculate the proportional change between the third quarter 2024 and third quarter 2025 index values, expressed mathematically as: (419.11864149 – 405.89713556) / 405.89713556 = 3.25735384 percent This is the standard calculation HERA prescribes,3 which results in a 2026 baseline loan limit value of $832,750.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — High-Cost Area Limit Values and the National Ceiling
High-Cost Area Limit Values and the National Ceiling HERA provides for FHFA’s setting of a high-cost area loan limit value as a function of local-area median home values. The local CLL value is higher in areas where 115 percent of the local median home value exceeds the baseline loan limit value. However, the local loan limit value cannot be more than 50 percent above the baseline loan limit value. In the District of Columbia and in all states except Alaska and Hawaii, the highest possible local area loan limit value, or “ceiling,” for a one-unit property for 2026 is $1,249,125 (150 percent of $832,750). Consistent with prior practice, FHFA used median home values estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD).4 FHFA compares county median home values within metropolitan and micropolitan statistical areas and then uses the highest value to determine the local area loan limit value.5 In determining the 2026 CLL values, FHFA continued its practice to not permit declines relative to prior loan limit values. While HERA does not explicitly prohibit declines in high-cost area loan limit values, this approach is consistent with the statutory procedure for responding to changes in prices on a national level. Consistent with this practice, the 2026 CLL values reflect the higher of the limit values calculated for 2026 under the HERA formula and the HERA loan limit values for the years 2009 through 2025.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — Special Exceptions
Special Exceptions Statutory provisions establish a baseline CLL value for Alaska, Hawaii, Guam, and the U.S. Virgin Islands that is 50 percent higher than the baseline loan limit value applicable to the contiguous United States. Because the baseline CLL value for the contiguous United States rose for 2026, the baseline CLL value in these statutorily defined areas also increased.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — Loan Limit Values for Multi-Unit Properties
Loan Limit Values for Multi-Unit Properties HERA requires that baseline loan limit values for two-, three-, and four-unit properties be increased by the same percentage as the increase in the one-unit limit value. Accordingly, the baseline loan limit value for two-, three-, and four-unit properties increased by 3.25735384 percent.6 For most areas (other than Alaska, Hawaii, Guam, and the U.S. Virgin Islands), the loan limit values for 2026 are $1,066,250, $1,288,800, and $1,601,750 for two-, three-, and four-unit homes, respectively. In high-cost areas, FHFA calculates the two-, three-, and four-unit CLL value by taking 115 percent of the local one-unit median home value and multiplying the product by two-, three-, and four-unit multipliers. Those multipliers correspond to the ratios of the two-, three-, and four-unit baseline loan limit values to the one-unit limit value HERA identifies.7 FHFA then compares the result to the local area loan limit value (for the relevant-sized property) to ensure that it is below the ceiling value.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — Acquisitions of Loans Originated in Certain Prior Years
Acquisitions of Loans Originated in Certain Prior Years Under a series of laws enacted in past years, including the Economic Stimulus Act of 2008, the American Recovery and Reinvestment Act of 2009, Public Law 111-88, and Public Law 111-242, higher loan limit values have applied to Fannie Mae and Freddie Mac acquisitions of certain seasoned mortgages. Acquired loans that originated between July 1, 2007, and Sept. 30, 2011, are subject to previously announced loan limit values determined under those laws. The applicable CLL value for such seasoned loans has been as high as $729,750 for one-unit properties in the contiguous United States. However, in 2024, the baseline loan limit value surpassed the statutory limit set for these seasoned loans. Consequently, the baseline loan limit value is the higher of the two values, and because FHFA continues its practice to not permit declines relative to prior loan limit values, the Enterprises will no longer be required to compare the two limit values to determine eligibility.
FHFA Addendum, Calculating 2026 Conforming Loan Limit Values Under HERA — Footnotes
Footnotes 1 See https://www.federalregister.gov/articles/2015/05/27/2015-12781/notice-of-establishment-of-housing-price-index. 2 See https://www.federalregister.gov/articles/2015/10/22/2015-26778/notice-of-establishment-of-housing-price-index. 3 As discussed in prior releases, the calculation is slightly more involved in periods immediately following house price declines. In such instances, prior declines must be “made up” before any loan limit increase can take place. No such adjustments were necessary in calculating the 2026 CLL value. 4 FHA has calculated those median values for the purpose of determining its own lending limits. Once the FHA loan limits are announced, FHA will allow a 30-day appeals period for the submission of data suggesting a potentially higher median home value for a given area. If FHA changes its median price estimates stemming from appeals, and if those changes would impact the FHFA conforming loan limits, FHFA may adjust the conforming loan limit values and announce the resulting changes. 5 Metropolitan and micropolitan statistical areas are defined in Office of Management and Budget (OMB) Bulletin 23-01, which was published in July 2023 at https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf. 6 The individual values have been rounded down to the nearest $50, consistent with the rounding practice for the baseline one-unit loan limit value. The high-cost area loan limit values are rounded down to the nearest $25. 7 The two-unit, three-unit, and four-unit multiples are 1.28021583 (=$533,850/$417,000), 1.54748201 (=$645,300/$417,000), and 1.92314149 (=$801,950/$417,000) respectively. Note that these unit multiples have been applied initially using the ratios implicit in the original HERA and the respective multi-unit limit values have been increasing by the same percentage as the baseline limit value specified in HERA. The multipliers would be trivially different if the new baseline limit values were used to form the ratios.
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