Contra Costa County FHA Loan Limits for 2025

As a mortgage company located in Contra Costa County, we like to keep local home buyers informed about home loan rules and requirements that might affect their purchasing power. This includes changes to the official FHA loan limits.

In 2025, the maximum mortgage amount for an FHA-insured home loan in Contra Costa County will go up, in response to rising home prices nationwide.

Contra Costa County FHA Loan Limits for 2025

In November 2024, the Department of Housing and Urban Development (HUD) announced that it would be increasing the maximum mortgage amount for FHA-insured home loans.

This change will affect most counties across the United States, including all 58 counties here in the state of California.

According to the HUD news release:

“Today, the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) is announcing new loan limits for calendar year 2025 for its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) mortgage insurance programs. Loan limits for most of the country will increase in the coming year due to the continued appreciation of home prices over the past year.”

• One-unit property: $1,209,750
• Two-unit property: $1,548,975
• Three-unit property: $1,872,225
• Four-unit property: $2,326,875

(Note: A “one-unit” property refers to a single-family home, “two-unit” refers to a duplex, and so on. For buyers purchasing a single-family home in Contra Costa County, the 2025 FHA loan limit is $1,209,750.)

Why Do FHA Loans Have Size Limits?

FHA loans are insured by the government, through the Federal Housing Administration. This agency falls under the Department of Housing and Urban Development, or HUD.

The actual loans are generated in the private sector, just like most other types of mortgages. The difference is that lenders who offer these loans receive additional protection against borrower default, through government insurance.

In short: If a borrower with an FHA loan is unable to repay the debt for some reason, the mortgage lender or servicer receives an insurance payout to cover some of their losses.

This is why FHA loan limits exist for Contra Costa County, and every county in the U.S. The government uses them to reduce their risk, and to keep the program focused on buyers seeking a moderately priced home.

It’s also a law. The National Housing Act requires the FHA to update its loan limits every year, using a specific formula.

The Result of Rising Home Values Nationwide

Contra Costa County experienced a slight increase in home values during 2024. But other parts of the Bay Area saw bigger price gains over the past year, especially down south in Silicon Valley.

FHA loan limits can vary by county, but they’re usually consistent across an entire metro area. This explains why Contra Costa will get higher limits for 2025, even though house values remained mostly flat over the past year.

Most other counties across the United States will get higher limits as well, and for the same reason. Nationwide home-price growth prompted federal housing officials to increase the maximum FHA mortgage amounts.

Conforming Limits Also Getting a Boost

“Conforming” loan limits apply to conventional mortgages that are not insured or guaranteed by the government. This distinguishes them from FHA loans, which do receive government backing.

Next year, Contra Costa County will see higher conforming loan limits as well.

In 2025, the maximum conforming mortgage amount for a single-family home located within the county will be $1,209,750, the same as FHA. Anything above this amount would be considered a “jumbo” mortgage.

In many counties across the U.S., the FHA and conforming loan limits are different (even within the same county). But Contra Costa is one of the high-cost areas that gets the maximum or “ceiling” for all mortgage programs.

What Buyers Should Know About This Program

Loan limits are an important aspect of the FHA loan program, because they can affect a home buyer’s borrowing capacity.

But this program has other important rules and requirements as well, including down payments and credit scores.

• Down payment: Borrowers have to make a minimum down payment equaling 3.5% of the purchase price or appraised home value.
• Credit score: Borrowers need a credit score of at least 500 to qualify for the FHA loan program, and a 580 or higher for the 3.5% down payment option.
• Debt level: Ideally, the borrower’s overall debt-to-income ratio should not exceed 43%. But it can be as high as 50% with compensating factors.
• Insurance: Borrowers must pay a mortgage insurance premium that helps to fund the program, regardless of the down payment amount.
• Property requirements: The home must serve as your primary residence and meet the FHA’s minimum requirements for health and safety.
• Income: Borrowers must have stable and sufficient income to meet their monthly debt obligations, as with any other type of home loan.

Benefits of FHA-Insured Mortgage Loans

The Federal Housing Administration (FHA) loan program was established in 1934 with the passage of the National Housing Act. The program is designed to help home buyers overcome some of the upfront hurdles, such as the down payment.

As mentioned above, FHA mortgage insurance protects lenders against losses. If a property owner defaults on their mortgage, the government will pay a claim to the lender for the unpaid principal balance.

Because of this, mortgage lenders are often more lenient with their qualification criteria for FHA borrowers, when compared to regular or non-government mortgage loans.

Home buyers in Contra Costa County can use an FHA loan to buy a house with a down payment as low as 3.5%. That’s an important benefit for any buyer, but especially those in expensive real estate markets like the Bay Area.

This program also offers flexible criteria for credit scores, debt ratios, and other borrower criteria.

Have Questions About This Program?

Do you have questions about the 2025 Contra Costa County FHA loan limits, or other aspects of this program? Want to begin the application process? We are here to help!

Bridgepoint Funding has been serving borrowers in California for nearly 20 years. We are a locally-owned company based in the East Bay. We offer a wide variety of mortgage products and programs, including FHA, VA, and conventional.