2021 FHA Loan Limits

FHA mortgage loans are a popular mortgage option for good reason. If you don't have a huge down payment or you have a lower credit score, an FHA loan could be the key to becoming a home owner.

What is an FHA Loan?

An FHA loan is a mortgage financing option insured by the Federal Housing Administration (FHA). This is different from conventional loans which are backed by Fannie Mae and Freddie Mac. The Federal Housing Administration doesn't actually issue funds--they only back the loans. To get an FHA loan, you need to apply with an FHA-approved mortgage lender. Similar to conventional mortgages, FHA loans have loan limits, which essentially places limits on the size of mortgages the FHA will insure.

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How FHA Limits are Determined

FHA loan limits aren't determined by your income or the amount you want to borrow. They are determined by location and the median home value of properties in an area. FHA loan limits are typically set at 115% of the median home price for the county or city, and they are also related to increases in conforming loan limits set by the Federal Housing Finance Agency (FHFA). Usually, FHA mortgage limits are about 65% less than conventional loan limits.

Current FHA Loan Limits

FHA loan limits have a floor and a ceiling, which accounts for the fact that homes in high-cost areas may be much more expensive than homes in the rest of the country. As of 2021, the FHA loan limit is $356,362 in most parts of the U.S., and $822,375 in high-cost areas. High-cost areas often include major cities where real estate and cost of living is higher - think Los Angeles, New York, Hawaii, Alaska, Guam, Washington D.C., and San Francisco. These loan limits are based on increases in home prices, and the FHA reviews its loan limits most years, although limits may remain unchanged from year-to-year. FHA loan limits have four tiers, based on property type.

2021 Loans Limits for FHA Mortgages

Standard 2021 FHA Loan Limits

  • One-unit: $356,362
  • Two-unit: $456,275
  • Three-unit: $551,500
  • Four-unit: $685,400

High-Cost Areas 2021 FHA Loan Limits

  • One-unit: $822,375
  • Two-unit: $1,053,000
  • Three-unit: $1,272,750
  • Four-unit: $1,581,750

Loan Limits for FHA Loans in Your State

If you're thinking about applying for an FHA loan, make sure you know what FHA loan limits apply to your area. Visit the U.S. Department of Housing and Urban Development's (HUD) website to find out. FHA loan limits are evaluated annually and updated if needed.

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How to Apply for an FHA Home Loan?

Ready to take the next step on your FHA home loan? We are an FHA-approved mortgage lender, and our team of loan experts is ready to help you get pre-approved for your loan. Contact us today to start your application.

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