At Avanti Way Financial, we know that navigating the homebuying process can be challenging, especially when it comes to understanding the various loan options available. One of the most accessible options for many potential homeowners is the Federal Housing Administration (FHA) loan, a government-backed loan that makes it easier for individuals, especially first-time homebuyers, to achieve homeownership. With relaxed credit score requirements, FHA loans are often a great solution for those who may face challenges in qualifying for conventional loans.
However, it’s important to understand that FHA loans come with certain limits based on your location and the type of property you’re purchasing. In this blog post, we’ll break down how FHA loan limits work, what the new limits are for 2025, and how you can find out the maximum loan amount available to you.
How FHA Loan Limits Work
FHA loan limits set a cap on the amount you can borrow to purchase a home. These limits are determined based on two primary factors:
- Location: The property’s location plays a crucial role in determining the loan limit. The FHA uses the distinction between low-cost and high-cost areas. High-cost areas typically include urban regions and expensive suburbs where home prices are significantly higher.
- Property Type: The type of property you’re buying also affects the loan limit. FHA loans are available for both single-family homes and multi-family homes with up to four units.
In low-cost areas, the FHA loan limit for a single-unit property is set at 65% of the loan limit for conventional loans. On the other hand, in high-cost areas, the loan limit can go up to 150% of the conventional loan limit. This distinction helps make FHA loans more accessible to homebuyers in areas with varying home prices.
2025 FHA Loan Limits
Each year, the FHA adjusts loan limits to reflect changes in housing costs. For 2025, the maximum FHA loan amounts are as follows:
- In low-cost areas, the limit for a one-unit property is $524,255.
- In high-cost areas, the limit increases to $1,209,750 for a single-unit property.
- For areas such as Alaska, Hawaii, and U.S. Virgin Islands, which have higher construction costs, the loan limits are even higher. For instance, in these regions, the loan limit for a one-unit property can be as high as $1,814,625.
Here’s a full breakdown of the 2025 FHA loan limits by property type:
| Units | Low-Cost Areas | High-Cost Areas | Alaska, Hawaii & U.S. Virgin Islands |
| 1 | $524,255 | $1,209,750 | $1,814,625 |
| 2 | $671,200 | $1,548,975 | $2,323,450 |
| 3 | $811,275 | $1,872,225 | $2,808,325 |
| 4 | $1,008,300 | $2,326,875 | $3,490,300 |
It’s important to note that FHA loan limits are typically lower than conventional loan limits. For example, in 2025, conventional loan limits for a one-unit property are capped at $806,500 in most parts of the U.S., while areas like Alaska, Hawaii, and some high-cost regions have a cap of $1,209,750.
How to Find Your County’s FHA Loan Limit
Since FHA loan limits vary by county, it’s essential to check the loan limit specific to your area. You can find the limit for your county by visiting the HUD’s FHA mortgage limits page. This will provide you with the most accurate information based on your location and the type of property you’re interested in purchasing.
FHA Loan Requirements
An FHA loan is backed by the Federal Housing Administration and offers several benefits to homebuyers, especially those with less-than-ideal credit or who are purchasing their first home. Here’s a quick overview of the typical requirements for an FHA loan:
- Debt-to-Income Ratio (DTI): You generally need a DTI of 57% or less to qualify.
- Down Payment: The minimum down payment is 3.5% of the purchase price.
- Credit Score: You’ll need a minimum FICO® score of 580 to qualify. Some lenders may approve applicants with a score between 500-579 with a higher down payment.
- Mortgage Insurance Premium (MIP): You’ll need to pay for an FHA MIP for at least the first 11 years of the loan repayment period.
- Proof of Income: You must provide proof of steady income, such as pay stubs, bank statements, or tax returns.
- Primary Residence: The property must be your primary residence, and you must move in within 60 days of closing.
The Bottom Line: Know Your FHA Loan Limits
The 2025 FHA loan limits reflect changes in the housing market and will vary based on your location and the number of units in the property. If you’re considering an FHA loan for your home purchase, make sure you’re familiar with the loan limits for your area, as this will determine the type of homes you can explore.
If you have questions or need assistance navigating your FHA loan options, Avanti Way Financial is here to help. Our team can guide you through the process, ensuring you understand the loan limits, requirements, and how they apply to your unique situation. Reach out today to learn more and get started on your path to homeownership!
