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.
