FHA Limits

FHA Limits

The FHA establishes a maximum loan amount that it will insure, known as the FHA Lending Limit. If you are seeking to purchase a home that costs more than this limit, you will need to cover the difference as part of your down payment.

Compared to Fannie Mae and Freddie Mac—government-sponsored entities that purchase mortgages from lenders—the FHA typically has higher lending limits. However, these limits can vary based on the loan type, property type, and the specific state or county in which you reside. Areas where the median home sale price exceeds the national average by a certain amount are categorized as “high-cost” areas by the FHA.

FHA loan limits are calculated and updated on an annual basis and are influenced by the conventional loan limits established by Fannie Mae and Freddie Mac. Additionally, the type of home—such as single-family homes or duplexes—can impact these lending limits.

As a result, many homebuyers may choose to look for homes in different counties with higher lending limits or adjust their home search to stay within the established FHA loan limits to ensure eligibility for financing through the FHA program.

Down Payment

The down payment is the money you pay upfront to your lender when buying a house. It varies based on what you can afford and the lender’s requirements.

Home Inspection

As a borrower, you might need a home inspection, where a professional checks the house’s condition. The report will highlight any issues found.

Principal

The loan balance is the remaining amount you owe on the mortgage principal, excluding interest. It’s what you need to repay to the lender.

Credit Report

Credit reports detail an individual’s credit history and payment behavior. Lenders use these reports to assess the risk of a borrower defaulting on a home loan.

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