FHA Loan Limits: 2022 FHA Loans up to $2.8 Million

The Federal Housing Administration (FHA) sets new loan limits each year for the mortgages it backs — you know these as FHA loans.

Why the ever-changing limits? The FHA adjusts the amount it will insure based on local housing prices. FHA loan limits are pegged to 115% of the median home price in a given area, and they’re usually set according to county.

What are the FHA loan limits for [loan_year]?

For [loan_year], FHA loan limits range from [loan_limit agency='fha' units='1' type='standard'] to [loan_limit agency='fha' units='1' type='high-cost'] for single-family homes and higher (sometimes much higher) for 2-4 unit homes. New limits are available on January 1 each year.

It’s important to realize, though, that FHA loan limits vary based on where you’re buying. We break down what you need to know about FHA loan limits in [loan_year] and how to find the limits in your area.

Who sets the FHA loan limits?

FHA loan limits are set annually by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD).

The FHA sets loan limits at 115% of the median home price in an area. FHA's base nationwide limit, known as the “floor,” loan limit, is [loan_limit agency='fha' units='1' type='standard'] for [loan_year]. The maximum loan amount —  known as the ceiling —  for a single-family home is [loan_limit agency='fha' units='1' type='high-cost'] .

Keep in mind that there is no minimum FHA loan amount. These figures refer to the maximum you can borrow in a given area.

And one more note, FHA has designated “Special Exception Areas,” namely Alaska, Hawaii, Guam, and the Virgin Islands. These limits are set to 150% of the “ceiling” limits. A one-unit home in these areas can be financed up to [loan_limit agency='fha' units='1' type='high-area'].

FHA loans aren’t the only mortgages with limits. The Federal Housing Finance Agency (FHFA) sets limits for conforming mortgages, which are backed by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. These are known as conforming loan limits.

For [loan_year], the conforming loan limits range between [loan_limit agency='fhfa' units='1' type='standard'] and [loan_limit agency='fhfa' units='1' type='high-cost'].

What happens if you want to buy a single-family home with an FHA loan for more than [loan_limit agency='fha' units='1' type='standard'] in a standard area, or the higher loan limit in high-cost areas? You’ll need to consider a conforming loan or jumbo loan. Conforming loans come with a base nationwide limit of [loan_limit agency='fhfa' units='1' type='standard'], higher than FHA's limit. Jumbo loans technically have no limit at all, since each lender sets their own guidelines for these loans. Lenders may charge higher interest rates and require higher credit scores and bigger down payments for jumbo loans.

Both FHA and conforming loan limits vary by area. Be sure to check the limits wherever you plan to buy. You can find the FHA loan limits in your county through the HUD search tool. 

Multi-unit homes

FHA sets higher limits if you want to buy a duplex, triplex, or four-plex. You can buy a 2-, 3-, or 4-unit home with FHA if you live in one unit. You are free to rent out the remaining units.

FHA limits for multi-unit homes are quite high. For instance, the standard limit across the U.S. for a 4-unit home is [loan_limit agency='fha' units='4' type='standard'].

Limits go up from there. A 2-unit home in Los Angeles County, Calif., allows for an FHA loan of [loan_limit agency='fha' units='2' type='high-cost'], and you can get a loan for [loan_limit agency='fha' units='4' type='high-cost'] on a 4-unit (assuming you qualify, of course).

But a truly amazing limit comes in Alaska and Hawaii, where an FHA loan on a 4-unit home maxes out at [loan_limit agency='fha' units='4' type='high-area'].  

[loan_year] FHA loan limits table

How can I find the FHA maximum loan amount in my county?

Knowing the maximum loan limit in your area tells you something about your local real estate market, since those numbers correlate to housing prices. But as you’ll see in the next section, how much a lender will approve you for depends on a lot more than local loan limits.

To look up the FHA’s maximum loan amount in different U.S. counties, check out the FHA mortgage limits search tool on HUD.gov. Choose “county” in the top drop-down menu and choose your state from the second drop-down menu. Then type the name of your county. Make sure Limit Type is “FHA Forward” and Limit Year is set to “CY[loan_year]” and hit Send.

FHA county loan limits can vary significantly even within a state. In California’s San Francisco County, for example, the maximum loan amount is [loan_limit agency='fha' units='1' type='high-cost']. But several hundred miles to the north, in Humboldt County, the FHA maximum loan amount is [loan_limit agency='fha' units='1' type='standard'].

The loan limits that apply to you may change based on real estate prices in the different towns and cities where you’re house-hunting.

Are FHA limits talking about home price or loan amount?

FHA limits refer to the loan amount, not the purchase price of the home.

So if you were buying a $1 million home in an area with a $600,000 FHA loan limit, you could get an FHA loan by putting down $400,000.

However, if you had this big a down payment, you might opt for a conventional loan which requires no mortgage insurance when putting down at least 20%.

But the example illustrates that there are no FHA home price limits, only loan amount limits.

What if I’m over FHA loan limits?

Let’s look at an example of a buyer in Humboldt County, Calif., where the maximum FHA loan amount is $420,680 for 2022.

The buyer is interested in a $500,000 home. Putting 3.5% down (the minimum down payment for FHA), the loan amount comes to $482,500. This is $61,820 over the limit.

The buyer can:

1. Make a down payment of $79,320 to get her loan amount down to local FHA limits
2. Receive gift funds for the difference
3. Opt for a 3% or 5% down conventional loan, which has a limit of $647,200 in this area. She would have to have a credit score above 620 for this option, and may incur higher rates and mortgage insurance depending on credit score
4. Get a second mortgage for the amount over the local FHA loan limit ($61,820 in this case). The applicant would have to qualify for the second payment, and would need to make a down payment of 3.5% of the purchase price.

It’s not very common to be over FHA loan limits, but it does happen. Fortunately, there are workarounds if you’re creative.

Who can get an FHA loan?

FHA loans are designed to make homebuying affordable for moderate- to low-income borrowers, so they have more flexible requirements than conventional loans. Are they only for first-time homebuyers? No, but that's one of many common myths about FHA loans.

There are no income limits or geographic requirements, though a lender will use your credit score, income, and debts to make sure you can afford a mortgage. 

To get approved for an FHA loan, you’ll need the following criteria: 

• Credit score: 580 (or higher with some lenders)
• Down payment: 3.5%
• Debt-to-income ratio (DTI): 50% and sometimes higher

Some lenders may even accept a credit score of 500-579 with a 10% down payment, but not all.

The home you want to buy must also meet FHA guidelines. Borrowers can use an FHA loan to buy a single-family home or a multifamily property with up to four units.

The property must pass an appraisal with an FHA-approved appraiser, who will determine the value of the property and whether it meets the FHA’s livability standards.

How to qualify for an FHA loan

To qualify for an FHA loan, you’ll need to apply with an FHA-approved lender.

Although FHA guidelines are more flexible than those for conventional loans, there are several steps you can take to boost your chances of approval.

• Check your credit score. The minimum credit score for an FHA loan with a 3.5% down payment is 580.
• Figure out how much down payment you can afford. You’ll need a 3.5% down payment to qualify for an FHA loan if your credit score is 580 or higher. If it’s between 500 and 579, you’ll need to put down 10% and find a lender that allows credit scores that low..
• Check 2021 FHA loan limits in your area. Loan approval will depend on your financial circumstances, but knowing the loan limits can set realistic expectations for how much you might be able to borrow.
• Review your employment history. Most lenders require two years of steady employment to approve a loan, although FHA is more lenient in most cases. Organize documents such as pay stubs and tax forms so your lender can verify your employment.
• Calculate your debt-to-income ratio. FHA lenders generally require that your total monthly debts (which include your estimated mortgage payment plus other debt obligations) are less than 50% of your gross (pretax) monthly income.
• Get preapproved with an FHA lender. Prequalification lets you know if the bank will approve you for a loan and gives you an idea of how much house you can afford.

Once you’ve been preapproved for an FHA loan, you can start looking for houses and make an offer once you find one you love. The home will need to pass an appraisal by an FHA-approved appraiser before the lender can give full approval to the loan.

FHA loan limits FAQs

I'm ready to apply

FHA loan limits tell you how much lenders are allowed to lend to FHA borrowers in their areas. But qualifying for an FHA loan — or any mortgage, for that matter — is much more personal than that.

Lenders are primarily concerned with whether you can afford a mortgage and how likely you are to pay it back. If you’re not sure whether you’ll qualify for an FHA loan but you’re ready to buy a home, the best thing you can do is ask.

By getting preapproved with a lender, you find out how much you can borrow and what types of houses you might soon be able to call a home.

Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA, and were not approved by a government agency.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.