FHA Loan Limits: What are they, and how do they work?

How much will the FHA lend me?

Woman holding a sign that says FHA LimitsFHA-insured loans are limited in amount by the FHA lending limit, which is updated annually. Fannie Mae and Freddie Mac establish the conventional loan limits, which are then used to calculate the FHA lending limits.

The type of home, such as single-family or duplex, can also affect these numbers.

What is an FHA loan?

An FHA loan is a type of mortgage that is insured by the Federal Housing Administration. The purpose of the FHA loan program is to enable more people to become homeowners by lowering the down payment requirement and eliminating strict credit score requirements.

This type of loan has a lower interest rate, a smaller down payment, and more flexible underwriting requirements than a conventional loan because it is backed by the FHA.

FHA Credit Score Requirement

FHA loan requirements vary based on the type of loan you’re applying for, your credit history, and the appraisal value of your home. In general, though, you’ll need to have a middle credit score of at least 580, although the FHA will permit a 500 credit score with a 10% down payment and sufficient income to cover all the mortgage payments.

FHA Home Loans Programs

There are three types of FHA home loans, each of which has its own set of requirements.

203(b) – The most popular FHA loan for a home purchase.

203(h) – This loan is available as a purchase or rehabilitation loan. This program is for disaster rehabilitation.

203(k) – This program combines the purchase money and rehabilitation in one loan. There are two variations with the 203(k) loan. The Limited 203(k) can roll in as much as $35,000 into the purchase money mortgage. The Standard 203(k) is a full-body rehab program.

FHA Refinance Programs

In addition to the various FHA purchase programs, the FHA offers many refinance options.

For example:

FHA Streamline programs

Additional refinance programs.

  • Rate and Term Refinance
  • Simple Refinance
  • FHA Cash-Out refinance

Low-cost Area Loan Limits

The FHA national low-cost area mortgage limitations, which are set at 65 percent of the national conforming limit of $548,250 for a one-unit property, are as follows,

One-unit: $420,680
Two-unit: $538,650
Three-unit: $651,050
Four-unit: $809,150

High-cost Area Loan Limits

The FHA national high-cost region mortgage limitations, which are set at 150 percent of the national conforming limit of $548,250 for a one-unit home, are as follows:

  • One-unit: $970,800
  • Two-unit: $1,243,050
  • Three-unit: $1,502,475
  • Four-unit: $1,867,275

Hawaii, Guam, and the Virgin Islands have special allowances for them:

  • One-unit: $1,456,200
  • Two-unit: $1,864,575
  • Three-unit: $2,253,700
  • Four-unit: $2,800,900

How FHA Loan Limits Are Set

The maximum amount that the Federal Housing Administration can insure is known as the lending limit. This is updated yearly and is influenced by the limits set by both Freddie Mac and Fannie Mae.

What Is the Max FHA Loan Amount for My County?

The easiest way to find the FHA loan limits for your county is by going to FHA Mortgage Limits page. On this webpage, you’ll see a table that lists the FHA loan limits for every county in the U.S.

What is an FHA jumbo loan?

An FHA jumbo loan is a mortgage that exceeds the conforming loan limit set by the Federal Housing Administration. Jumbo loans typically have higher interest rates and stricter underwriting requirements than conforming loans.

A jumbo FHA loan is a loan with a principal balance that exceeds the usual maximum of $420,680.

Rotating question markFrequently Asked Questions

Q. How much is the maximum loan amount for an FHA loan?

A. The maximum loan amount for an FHA loan varies depending on the location of the property. In general, the maximum loan amount is $420,680 for a single-family property.

Q. If I put 20% down on an FHA loan, what will happen?

A. The 20% down payment only reduces the amount you pay for the upfront and monthly FHA fees.

Q. How much do you have to put down on an FHA loan?

A. Just 3.5%, unless the loan is a 203(h) loan. In which case, there is no down payment.

Q. What will happen if I pay an additional one hundred dollars on my mortgage every month?

A. Use our amortization calculator for the answer to your question.

Q. I have an FHA loan; is it possible for me to cancel my PMI?

A. No

Q. Is the FHA program restricted to first-time homebuyers only?

A. The FHA program is not limited to first-time homebuyers. The FHA program is available to anyone who meets the eligibility requirements, which includes borrowers who have never owned a home before and borrowers who have owned a home in the past.

Q. Is it possible to purchase a home with no money down at all?

A. The Veteran loan is no money down. The USDA loan is also 100% financing.

Read more questions and answers about FHA loans

Conclusion

An FHA loan is a type of mortgage that is insured by the Federal Housing Administration. The FHA has a maximum loan amount that it will insure, which is known as the FHA lending limit. 

Fannie Mae and Freddie Mac impose yearly conventional lending restrictions. They affect lending limitations. Find the FHA loan limits for your county by going to https://entp.hud.gov/idapp/html/hicostlook.cfm. An FHA jumbo loan is a mortgage that exceeds the conforming loan limit set by the Federal Housing Administration.

The FHA program is available to anyone who meets the eligibility requirements, and not just first-time homebuyers. The USDA loan is also 100% financing.