Great news for those who wish to own their own home. There is a new baseline FHA loan limit for this year, 2022. From $356,360 it will be $420,680 for single-family phones. This increase is because the Federal Housing Administration is trying to keep up with the home price inflation.
What does this FHA loan limit mean for homebuyers? The opportunity to have more considerable legroom to choose homes is one of the benefits of this FHA loan limit increase. With the increase, how much can one borrow? The maximum FHA loan you can get for a 1-unit property is $970,800, but it depends on your debt-to-income ratio, credit score, and financial capacity to pay.
Here’s the breakdown of the maximum loanable amount under the new FHA loan limit increase:
- High-cost area – $970,800
- Mid-cost area – $420,681 -$970,799
- Low-cost area – $420,680
Living in the islands (Hawaii, Guam, Alaska, and the Virgin Islands) will give you a higher loanable amount of $1,456,200 because construction costs are being factored in.
How to qualify for an FHA loan is relatively easy as this loan program is geared toward helping low-income families or even those with low credit scores. To qualify, you must have a credit score of 580 or higher and can afford a downpayment of 3.5% or more. When it comes to your debt-to-income ratio, 45% or less is ideal, and you much have a steady income to prove that you can afford to pay your monthly loan payment. Being employed for two years is a good enough qualification as well.
With the current low-interest rates and higher FHA loan limits, now is the best time for you to take a second look at FHA financing. To know if you can avail of the new Fha Loan limits for 2022, talk to our mortgage loan officer to help you develop a plan to help you start owning your forever home.