There are some common questions about FHA home loan limits for the Single-Family Mortgage program. Do you know what the home loan limit is in your area or how it affects your mortgage transaction?
Do All Government-Backed Mortgages Include Loan Limits?
At one time, all government-backed home loans carried a loan limit. However, in 2020 after changes in federal law, the Department of Veterans Affairs altered its VA Home Loan program to eliminate mortgage loan limit requirements.
FHA mortgages and USDA mortgages still have loan limits.
What Are FHA Loan Limits?
The FHA loan limit is a calculation made by the FHA. The limit is based on “the median house prices in accordance with the National Housing Act” according to the official site. The limits are published once at the end of each year.
But they can be updated again during the year–FHA loan limits are subject to additional revision where applicable. It’s not common, but it does happen from time to time.
FHA’s Single Family forward mortgage limits are applied according to Metropolitan Statistical Area (MSA) and county; the FHA loan limit is the highest amount you can borrow with this type of government-backed mortgage.
What The Limit Does
FHA loan limits have a “floor” and a “ceiling”. These are the limits in low-cost and high-cost areas of the country. The loan limit in a low-cost area is not the same as in a high-cost area, but both are subject to annual review and housing markets may be reconsidered for different limits depending on circumstances.
In 2020, the FHA floor for a single-unit property was set at $331,760, and the ceiling was set at $765,600.
Does The FHA Offer Higher Loan Limits For Multi-Unit Properties?
Yes. There are higher limits for two, three, and four-unit properties under the FHA loan program.
If you are talking to a participating FHA lender about your mortgage, ask the loan officer what the limit is for the size of the property you want–from a single unit up to four.
If the limit is lower than you anticipated be sure to ask the lender about Jumbo Loan options and other possibilities.
Are FHA Loan Limits Published Online?
Yes. You can view the current year’s FHA loan limits or find them at the HUD official site.
When Are FHA Loan Limits Updated?
Typically FHA loan limits are updated and published in the last month of the year, though occasionally there have been second updates published as circumstances warrant. Ask your lender if you aren’t sure how to access the current year’s rates or those of a previous year.