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FHA Loan Limits in 2020

An FHA mortgage loan might be a suitable option if you’re a home buyer with limited funds for a down payment, or if you have a lower credit score. But while these loans can help buyers with low-to-moderate incomes, anyone can apply for FHA financing. This is an accessible and popular financing program for all, yet FHA loans do have loan limits that restrict borrowing capacity.

GETTING AN FHA LOAN

What is an FHA Loan?

An FHA loan is a mortgage financing option insured by the Federal Housing Administration. This is different from conventional loans which are backed by Fannie Mae and Freddie Mac. To be clear, the Federal Housing Administration doesn't issue funds--they only back the loans.

To get an FHA loan, you need to apply with an FHA-approved mortgage lender. Similar to conventional mortgages, FHA loans have loan limits, which essentially places limits on the size of mortgages the FHA will insure.

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How FHA Limits are Determined?

FHA loan limits are not determined by income or loan amount. They are determined by location and the median home value of properties in an area. FHA loan limits are typically set at 115% of the median home price for the county or city. FHA loan limits are also influenced by increases in conforming loan limits. Typically, FHA mortgage limits are about 65% less than conventional loan limits.

Current FHA Loan Limits

As of 2020, the FHA loan limit is $331,760 in most parts of the U.S., and $765,600 in high-cost areas. High-cost areas include Los Angeles, New York, Hawaii, Alaska, Guam, and San Francisco. These loan limits are based on increases in home prices, and the FHA reviews its loan limits most years, although limits may remain unchanged from year-to-year. FHA loan limits have four tiers, based on property type.

Loan Limits for FHA Loans in Your State

Since FHA loan limits vary by county and state, you can visit the U.S. Department of Housing and Urban Development's (HUD) website for FHA loan limits in your area. New loan limits are updated annually, if applicable.

High-Cost 2020 FHA Loan Limits

  • One-unit: $765,600
  • Two-unit: $980,325
  • Three-unit: $1,184,925
  • Four-unit: $1,472,550

Standard 2020 FHA Loan Limits

  • One-unit: $331,760
  • Two-unit: $424,800
  • Three-unit: $513,450
  • Four-unit: $638,100

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