What is a High-Cost Area?

A high-cost area is a city, county, or parish where the median home value significantly exceeds the national average, leading to higher loan limits for mortgages.
A Longer Definition: High-Cost Area
In the context of mortgages, high-cost areas are geographic regions where home values are significantly higher than the national average. The concept was legally established under the Housing and Economic Recovery Act (HERA) of 2008, and gives home buyers in those areas access to higher mortgage loan limits. Conventional mortgages and FHA mortgages use different loan limits.
For example, the current conforming mortgage loan limit is $766,550 for a one-unit home. In high-cost areas, the conforming loan limit ranges up to $1,149,825 .
The formula for identifying which areas are high-cost is straightforward. If a region's median home value exceeds 115% of the baseline mortgage loan limit, that area is designated as a high-cost area, and its local loan limits are adjusted upwards proportionally.
Without this adjustment, many first-time home buyers would have to use jumbo mortgages to buy their homes, often with stringent underwriting criteria and higher mortgage rates. Designating an area as high-cost makes homeownership more affordable and accessible to all.
High-Cost Area: A Real World Example
Imagine a scenario where a first-time home buyer is eager to purchase a home in a well-known, high-cost area like San Francisco. They come across a home that, while relatively modestly priced for the Bay Area, still has a sale price significantly higher than what one would typically find in other parts of the country.
In most cities, the cost of the home would necessitate a jumbo loan, which often asks for large down payments and stricter credit qualifications. However, because the buyer is purchasing in a high-cost area, their starting loan size will fall within the special, increased mortgage loan limits specially designated for high-cost areas like this one.
Furthermore, because the mortgage remains within conforming mortgage loan limits, the buyer opts to use Fannie Mae's HomeReady mortgage, which allows for a 3 percent downpayment with reduced mortgage insurance costs, making the prospect of owning a home in an expensive market like San Francisco a realistic and achievable goal.
High-Cost Areas For 2025 Mortgage Loan Limits
The Federal Housing Finance Agency evaluates median home prices in every U.S. county each year, assigning the high-cost designation to qualified counties and metropolitan statistical areas.
The following counties were added to the high-cost area list for 2025:
- Fairfield County, Connecticut
- Grand County, Colorado
No counties were removed from the high-cost area list for 2025, but the following counties were removed from high-cost list in 2024 and remain on the standard conforming loan limit list for 2025.
- Box Elder County, Utah
- Camas County, Idaho
- Davis County, Utah
- Dutchess County, New York
- El Dorado County, California
- Morgan County, Utah
- Orange County, New York
- Placer County, California
- Sacramento County, California
- Weber County, Utah
- Yolo County, California
Here is a complete list of counties assigned a high-cost conforming mortgage loan limit for 2025:
Alaska
- Aleutians East Borough
- Aleutians West Census Area
- Anchorage Municipality
- Bethel Census Area
- Bristol Bay Borough
- Chugach Census Area
- Copper River Census Area
- Denali Borough
- Dillingham Census Area
- Fairbanks North Star Borough
- Haines Borough
- Hoonah-Angoon Census Area
- Juneau City and Borough
- Kenai Peninsula Borough
- Ketchikan Gateway Borough
- Kodiak Island Borough
- Kusilvak Census Area
- Lake and Peninsula Borough
- Matanuska-Susitna Borough
- Nome Census Area
- North Slope Borough
- Northwest Arctic Borough
- Petersburg Census Area
- Prince of Wales-Hyder Census Area
- Sitka City and Borough
- Skagway Municipality
- Southeast Fairbanks Census Area
- Wrangell City and Borough
- Yakutat City and Borough
- Yukon-Koyukuk Census Area
California
- Alameda County
- Contra Costa County
- Los Angeles County
- Marin County
- Orange County
- San Benito County
- San Francisco County
- San Mateo County
- Santa Clara County
- Santa Cruz County
- Napa County
- San Diego County
- Ventura County
- San Luis Obispo County
- Monterey County
- Sonoma County
- Santa Barbara County
Colorado
- Eagle County
- Garfield County
- Pitkin County
- Routt County
- Summit County
- San Miguel County
- Boulder County
- Adams County
- Arapahoe County
- Broomfield County
- Clear Creek County
- Denver County
- Douglas County
- Elbert County
- Gilpin County
- Jefferson County
- Park County
- Grand County
Connecticut
District of Columbia
Florida
Hawaii
Idaho
Maryland
Massachusetts
New Hampshire
New Jersey
- Bergen County
- Essex County
- Hudson County
- Hunterdon County
- Middlesex County
- Monmouth County
- Morris County
- Ocean County
- Passaic County
- Somerset County
- Sussex County
- Union County
New York
- Bronx County
- Kings County
- Nassau County
- New York County
- Putnam County
- Queens County
- Richmond County
- Rockland County
- Suffolk County
- Westchester County
Pennsylvania
Tennessee
- Cannon County
- Cheatham County
- Davidson County
- Dickson County
- Macon County
- Maury County
- Robertson County
- Rutherford County
- Smith County
- Sumner County
- Trousdale County
- Williamson County
- Wilson County
Utah
Virginia
- Arlington County
- Clarke County
- Culpeper County
- Fairfax County
- Fauquier County
- Loudoun County
- Madison County
- Prince William County
- Rappahannock County
- Spotsylvania County
- Stafford County
- Warren County
- Alexandria City
- Fairfax City
- Falls Church City
- Fredericksburg City
- Manassas City
- Manassas Park City
Washington
West Virginia
Wyoming
Common Questions About High-Cost Areas
What determines if an area is considered high-cost?
An area is considered high-cost if its median home values exceed 115% of the baseline conforming loan limit set by the FHFA. This designation is based on local housing market data and varies across regions.
How do high-cost mortgage loan limits differ from standard mortgage loan limits?
High-cost area loan limits are higher than those in standard areas. While the exact limits vary, they can reach 150% of the national conforming loan limit to accommodate higher property values in these regions.
Does living in a high-cost area affect mortgage interest rates?
The mortgage interest rates in high-cost areas are comparable to those in standard areas for conforming loans. However, avoiding a jumbo loan, which may have higher rates, can be a financial benefit.
Are there special mortgage programs available in high-cost areas?
Yes, programs like Fannie Mae's HomeReady mortgage and Freddie Mac's Home Possible mortgages cater to first-time home buyers in high-cost areas, offering low down payment options and favorable loan term, making homeownership more accessible.
How do I see my local mortgage loan limit?
To find your local mortgage loan limit, use this interactive mortgage loan limit tool.
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