FHA home loans, like most government-backed mortgages except for VA loans, feature loan guaranty limits which are established by county. These are annual limits and are revised (or at least considered for revision) every year.
The FHA and HUD set FHA loan limits for areas that are average-cost housing markets, but also for high-cost counties and low-cost areas. FHA loan limits vary depending on a variety of factors including the nature of the cost of local housing.
States have similar FHA loan limits in most counties with an outlier here or there; other housing markets (including California and New York) may have more high-cost counties than low-cost ones. East Coast real estate markets can be notorious for this, depending on location, and the FHA loan limit rules are designed to accommodate more expensive housing markets where needed.
Do You Need To Find FHA Home Loan Limits?
First-time home buyers unsure where to find the FHA loan limit for a given area have a variety of resources to use to explore the limits. Some borrowers aren’t sure which county they’ll wind up purchasing a home in (at first) so it pays to know the loan limits for the surrounding counties if this applies to you.
You can look up the FHA loan limits by state and see a breakdown of counties in that state and their FHA loan limits for single-unit all the way up to four-unit properties.
The Federal Housing Administration official site, FHA.gov, provides a search tool to look up the loan limits by county there. HUD.gov also has resources including FHA loan limits.
Some prefer to discuss their home loan needs including maximum loan amounts with a participating lender–ask about the FHA loan limits for the neighborhoods where you might want to buy–knowing if there are variations near you (higher or lower) is helpful for selecting the right county to buy in if you are looking for a higher loan limit.
Not everyone comes to the home buying process with that as a consideration, but for those who do, knowing if there are higher-limit counties nearby can help.
FHA Loan Limits: Other Issues
If you are contemplating an FHA One-Time Close Construction Loan, your lender can help you determine a budget for the project (based on other typical construction loans) to give you an idea of whether the size and configuration of the home you want matches issues like the FHA loan limit and the size of your down payment.
Are you interested in a multi-unit home? Remember that FHA loan limits go up based on the number of units. That said, not all FHA lenders will approve a multi-unit purchase for all types of mortgages.
Some lenders will only approve FHA Construction Loans for single-unit homes, for example. The policies of the participating lender will be key.
FHA home loan limits change annually, but if you got an FHA case number assigned in the previous year, that year’s limit applies. FHA loan limits, as revised for the new year, are applicable only to case numbers assigned on or after 1 January each year and expire at the end of that given year.