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Agencies Finalize Threshold Adjustments for 2025

Michael Christians • December 28, 2024

Each year, the federal banking agencies are required to update several thresholds throughout federal law to account for inflation. The Federal Housing Finance Agency (FHFA) and Consumer Financial Protection Bureau (CFPB) have announced the following thresholds effective January 1, 2025.

Fannie Mae and Freddie Mac Jumbo Loan Limit

$806,500 ($1,209,750 for high-cost areas)

Home Mortgage Disclosure Act Institutional Coverage Test

An institution that meets the following four-part test is subject to HMDA:

Assests in excess of $58 million as of 12/31/2024
Home or branch office in a Metropolitan Statistical Area (MSA)
Originated at least one home purchase or refinance transaction in the preceding calendar year
Federally insured or regulated

Qualified Mortgage Pricing Test

First Lien Loans

The APR charged in connection with the transaction does not exceed the current value of the APOR index by more than:

2.25% for loans greater than or equal to $134,841
3.50% for loans greater than or equal to $80,905 but less than $134,841
6.50% for loans less than $80,905

Subordinate Lien Loans

The APR charged in connection with the transaction does not exceed the current value of the APOR index by more than:

3.50% for loans greater than or equal to $80,905
6.50% for loans less than $80,905

Qualified Mortgage Points and Fees Test

Loans greater than $134,841 - 3% of the loan amount
Loans between $80,905 and $134,841 - $4,045
Loans between $26,968 and $80,905 - 5% of the loan amount
Loans between $16,855 and $26,968 - $1,348
Loans less than $16,855 - 8% of the loan amount

Small Creditor Definition

An institution that meets the following two-part test is considered a small creditor:

During the preceding calendar year, the institution and its affiliates together originated 2,000 or fewer covered transactions secured by a first lien
Excludes loans retained in the institution's portfolio
At the end of the preceding calendar year, the institution together with its affiliates had total assets of less than $2.717 billion

Higher Priced Mortgage Loan Appraisal Requirement

Generally, in connection with a higher priced mortgage loan, an institution must obtain a written appraisal of the subject property. However, if one of the following exceptions applies, an alternative method of valuation may be used:

The higher priced mortgage loan also meets the definition of a qualified mortgage
An extension of credit equal to or less than $33,500
A transaction secured by a mobile home, boat, or trailer
A construction loan
A bridge loan with a term of 12 months or less
A reverse mortgage

High-Cost Mortgage Points and Fees Test

A loan is considered high cost if the points and fees charged in connection with the transaction exceed:

5% of the loan amount for loans of $26,968 or greater
For loans of less than $26,968, the lesser of -
8% of the loan amount, or
$1,348

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