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.

FHA Funding Fee

FHA funding fees are insurance premiums needed to secure your loan. How much you pay depends on your loan size, term, and down payment amount.

Annual Income

Your annual income is everything you earn in a year, like wages, salary, tips, bonuses, and overtime. For mortgages, lenders mostly look at wages or salary.

Cash-Out Refinance

A cash-out refinance means you swap your current mortgage for a new one with a bigger loan. This lets you access the home equity you’ve built up over time.

FHA Requirements

The FHA has guidelines that applicants must meet to qualify for a government-backed loan. These requirements are managed by the FHA and HUD together.

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