The surge in home prices has led the FHA to increase its loan limits for 2022. With this latest increase, the new baseline limit for single-family home purchases is $420,680. 

If you are a borrower considering an FHA loan, this increased loan limit opens up new possibilities when home shopping. 

Let’s take a closer look at the FHA loan limits for 2022.

Check your FHA loan eligibility. Start here (Dec 5th, 2023) 

What are FHA loan limits?

FHA loan limits represent the maximum loan amount that the FHA will insure. Although these limits vary by county and home type, the new baseline limit for single-family home purchases is $420,680 for 2022. 

What’s the most you can borrow with an FHA loan?

We’ve established that the baseline limit for a single-family home purchase with an FHA loan is $420,680. But the limit varies based on your county and the property type. 

For those living in high-cost areas, you can borrow more with an FHA loan. In some counties, you can borrow up to $970,800 for a single-family home. Some high-cost areas include San Francisco, Los Angeles, El Dorado County, Napa County, Alameda, San Mateo, Santa Clara and Santa Cruz. But not all of the higher limits are tied to California counties. Other hot spots with higher limits include Denver and Salt Lake City. 

For residents of Alaska, Hawaii, Guam or the U.S. Virgin Islands, FHA loan limits can be pushed even higher to $1,456,200 for one-unit properties. 

If you are a homebuyer seeking a multi-family property, the loan limits increase again. Here are the limits you’ll face:

• 2-unit properties. In a low cost of living area, the maximum you can borrow is $538,650. But in a high cost of living area, that limit increases to $1,243,050. 

• 3-unit properties. In a low cost of living area, the maximum you can borrow is $651,050. But in a high cost of living area, that limit increases to $1,502,475.

• 4-unit properties. In a low cost of living area, the maximum you can borrow is $809,150. But in a high cost of living area, that limit increases to $1,867,275.  

A very limited number of counties qualify for the maximum loan limit. If you aren’t sure how your county stacks up, check out this map with all of the loan limits.

FHA loan limits for 2022

Understanding FHA loan limits can help you keep your home search within the appropriate price range. Here’s a breakdown of the loan limits to keep in mind. 

FHA loan limits 2022

Remember that your county might have a loan limit that falls somewhere in between the lowest and highest limit.

FHA loan requirements

If you are considering an FHA loan, here are the requirements you’ll need to meet. 

• Credit score. Borrowers with a minimum credit score of 500 can apply with a 10% down payment. Borrowers with a credit score of at least 580 may qualify for a down payment of just 3.5%. 

• Living situation. You must intend to live in the property as a primary residence, which means moving in within 60 days of closing and living in the home full-time. 

• Minimum property standards. The property must meet the FHA’s minimum standards which include livable conditions without any safety hazards present. 

• Debt-to income ratio. You cannot have a DTI over 43% in most cases (though there may be exceptions). And your mortgage payment cannot account for more than 31% of your monthly income. 

Many first-time homebuyers pursue FHA loans. But you don’t have to be a first-time buyer to obtain an FHA loan.

FHA loan benefits

An FHA home loan comes with plenty of advantages. A few of the biggest benefits include:

• Low credit score. The credit score requirements are lower for FHA loans than for other loan types. 

• Low down payment. You may only have to put 3.5% down on your home purchase. 

• Closing costs options. In some cases, you can roll closing costs into your loan. 

If you’ve struggled to qualify for another loan type, have a low credit score or can’t save up a big down payment, then an FHA loan could be a great option.

Considering an FHA loan? Start here (Dec 5th, 2023)  

FHA vs conforming loan limits

Conforming loan limits are set by the Federal Housing Finance Agency (FHFA). Non-conforming loans not backed by the government are relatively rare because Fannie Mae and Freddie Mac won’t guarantee higher loan amounts. As of 2022, the Federal Housing Finance Agency set the national confirmation loan limit at $647,200. 

However, FHA loans backed by the Federal Housing Administration have different loan limits. The national baseline loan limit is 65% of the national conforming loan limit. With that, FHA loans have a limit of $420,680 in 2022. 

This baseline amount only applies in counties where 115% of the median home price is less than $420,680. In counties with higher costs, the FHA sets the limit at 150% of the conforming loan limit, which is $970,8000 for 2022. 

FHA loan limit FAQ

What is the maximum FHA loan limit?

In 2022, the maximum FHA loan limit for most counties is $420,680. But in high cost of living areas, the limit can increase to $970,800. For those living in Alaska, Hawaii, Guam or the U.S. Virgin Islands, you’ll find an even higher loan limit of $1,456,200. 

What are the FHA loan limits for 2022?

The baseline FHA loan limit for 2022 is $420,680. But in some counties, that limit can be increased up to $970,800 to account for higher housing costs. 

Will FHA loan limits increase in 2022?

FHA mortgage limits increased in 2022 to a new baseline of $420,680. The FHA may increase the loan limits again next year if median housing prices continue to rise.

What is the maximum amount you can borrow for an FHA loan?

The maximum amount you can borrow for an FHA loan depends on your location and the property type. 

The maximum amount you can borrow in Alaska, Hawaii, Guam or the U.S. Virgin Islands toward a single-family home is $1,456,200. If buying a four-unit property in one of these locations, you can borrow up to $2,800,900. However, most counties have a maximum loan limit of $420,680 for single-family homes and $809,150 for a 4-unit property. 

What will disqualify you from an FHA loan?

Even with relatively flexible credit requirements, you can still be disqualified from an FHA loan. Your application may be denied if your credit score is below 500, you have a debt-to-income ratio over 45% or you don’t have the savings to cover the down payment. 

But mortgage lenders can choose to deny your application for an FHA mortgage for any number of reasons. If your application is turned down, consider reaching out to ask why. 

Do FHA limits increase every year?

The FHA limits often increase annually. But the decision to increase the loan limits is based on the current housing market. 

FHA loan limits are tied to the limits set by the Federal Housing Finance Agency for conforming loans. The U.S. Department of Housing and Development (HUD) requires that the limits be reviewed on an annual basis. But there is no rule that says the limits must increase each year. With that, there may be some years in which the FHA loan limits do not increase. 

Do FHA loans require mortgage insurance?

Yes, FHA loans require paying mortgage insurance. The cost is a two-part deal. First, you’ll make an upfront mortgage insurance premium. After that, you’ll make monthly mortgage insurance premium payments while paying off your FHA loan. 

Which types of properties are eligible for the FHA program?

You can purchase properties with one to four units through an FHA loan. But you’ll need to live in the property as a primary residence. Investment properties are not eligible for FHA loans. 

What’s the actual cost of owning a home with an FHA loan?

When you own a home with an FHA loan, you’ll be stuck paying mortgage insurance premiums each month. Make sure to factor this additional cost into your budget as a homeowner. 

What if I don’t have enough for a 3.5% down payment?

If you don’t have enough saved for a 3.5% down payment, then an FHA loan is not a good fit for you. Instead, consider pursuing a conventional loan that requires 3% down. Or check to see if you qualify for a no money down loan, such as a VA loan or USDA loan.

Check your FHA loan eligibility. Start here (Dec 5th, 2023)