June 28, 2017

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VA Loan Answers: The Difference Between “Maximum Loan Amount” and “Maximum FHA Loan Guaranty”

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There is a commonly asked question about FHA loans that pertains to the amount of loan a borrower is eligible to apply for; what is the FHA maximum loan amount?

There is no set, across-the-board limit for an FHA mortgage. Instead, the loan amount is determined in part by the appraisal and in part by the FHA mortgage guaranty limits for that county. Those limits are not on the actual amount the loan is for, but rather for the amount the FHA will insure.

According to FHA loan rules in HUD 4155.1, “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by the lesser of the property

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