If you are thinking about the FHA country loan limits for this year, then you are on the right track! A new and increased limit for most single-family homes is pegged at $420,680 from last year’s $356,360 limit. With the almost $65,000 increase, the Federal Housing Administration (FHA) hopes to keep up with the rising cost of owning a home.
What does this increase in FHA country loan limits mean? Depending on your qualification, a borrower can expect most for his FHA loan is $420,680 for a single-family home. Still, the amount gets more significant for a 2,3, or 4-unit property and will go even higher depending on your location. In a high-cost area, a 1-unit property will give you $970,800 and almost $2 million for a 4-unit house.
As always, the amount the lender will give you depends on your financial health – debt-to-income ratio, credit score, and the amount you can afford for your down payment. As FHA country loan limits differ from one location to another, here’s what you need to know for single-family homes:
- Low-cost area – $420,680
- Mid-Range Area – $420,681 – $970,799
- High-Cost Area – $970,800
- AK, HI, Guam, & Virgin Islands – $1,456,200
You may be wondering why Alaska, Guam, Hawaii, and the Virgin Islands can get over $1 Million for a single-family home for their FHA country loan limits – it is because of their location, which demands a higher cost of construction materials.
As always, FHA loans cannot be used for a vacation home purchase or an investment. In the case of FHA loans being used to purchase 2-4 unit properties, one unit must be lived in by the borrower, and the other units can be rented out.
Is your credit score at least or higher than 580? 45% or less debt-to-income ratio? Can you also say that you have been employed and earned for the past two years? Now that FHA country loan limits differ from one location to another, it is good to know that different lenders also vary slightly in their qualifications. For more detailed information, let us know how we can assist you.