California residents with lower credit scores or limited down payment savings can still purchase property with the help of an FHA loan. These mortgages, backed by the Federal Housing Administration, limit how much you can borrow depending on where you live. For many single-family homebuyers in California, the FHA loan limit is $498,257, but in more expensive areas like Los Angeles, Orange, Santa Cruz and San Francisco counties, you could borrow as much as $1,149,825.
For many homebuyers in Los Angeles, an FHA loan can be the ideal mortgage option FHA loans require just 35% down and have flexible credit and income guidelines. This makes them one of the most affordable and accessible loan programs.
But there are some unique factors to consider specifically when using FHA financing to purchase a home in the Los Angeles metro area.
This comprehensive guide will cover all the key details potential FHA borrowers need to know about obtaining an FHA-insured mortgage in LA
FHA Loan Basics
Before diving into the LA specifics, let’s do a quick overview of how FHA loans work:
- Insured by the Federal Housing Administration (FHA)
- Require just 3.5% down payment
- Offer fixed and adjustable rates
- Popular choice for first-time buyers
- Lower credit score requirements
- Funds can be gifted for downpayment
- Lower monthly mortgage insurance
FHA loans are provided by private lenders but insured by the FHA. This insurance protects the lender from losses if the borrower defaults.
In exchange for that insurance FHA sets guidelines for lenders that aim to expand homeownership access. This includes allowing lower down payments credit scores, and debt ratios than conventional loans.
Why Choose FHA in Los Angeles?
There are a few key reasons an FHA loan can make sense for LA homebuyers:
Affordability
FHA loans require just a 3.5% down payment, which significantly lowers the cash needed to buy versus a conventional 20% down loan. This helps first-time buyers in particular enter the market.
Lenient Guidelines
LA has a high cost of living and home prices significantly above the national median. FHA’s flexible credit and debt-to-income requirements help more buyers qualify despite LA’s challenges.
High Loan Limits
FHA ties its loan limits to an area’s home values. Due to LA’s steep prices, FHA loans here can exceed $800,000 depending on the county.
Streamlined Condos
Many LA buyers opt for condos. FHA has easier condo approval than conventional loans, which helps approve more buildings.
Gifted Funds
Gifts from family are permitted for downpayment under FHA. This allows buyers to get into a home even without large cash reserves.
FHA Loan Requirements in Los Angeles
FHA loans come with certain eligibility standards buyers must meet. Here are some key requirements to know in LA:
Down Payment
FHA requires just 3.5% down on purchase loans. On a $500,000 home, that’s only $17,500 compared to $100,000 on a conventional 20% down loan.
Credit Scores
FHA’s minimum credit score is 580. But scores of at least 620 are recommended to get the best rates from lenders. Many LA lenders prefer 640+ scores.
Debt-to-Income Ratio
Your total monthly debt payments, including the new mortgage, can’t exceed 43% of your gross monthly income under FHA guidelines.
Cash Reserves
FHA doesn’t require huge cash reserves. But lenders often like to see reserves equivalent to 2-3 months of mortgage payments in your bank accounts.
Homebuyer Education
First-time buyers in LA are required to complete a homebuyer education course to get FHA financing.
Maximum FHA Loan Limits in Los Angeles
As mentioned above, FHA ties its maximum mortgage amounts to an area’s median home values. Here are the current 2023 FHA loan limits for LA and surrounding counties:
- Los Angeles County – $823,500
- Orange County – $752,950
- San Diego County – $753,600
- Riverside County – $517,500
- San Bernardino County – $517,500
As you can see, LA and Orange counties have significantly higher limits than the rest of Southern California due to their steep home prices.
These current FHA loan limits apply to low down payment FHA 203(b) purchase mortgages. The limits are even higher for FHA limited cash-out refinances designed for homeowners.
Popular Los Angeles Neighborhoods for FHA Buyers
Certain LA communities tend to attract more FHA buyers because they offer relative affordability while still providing good housing stock and desirable locations:
South Los Angeles – Affordable home prices plus access to Downtown and freeways make South LA popular for FHA.
Pacoima – One of the most reasonably priced Valley neighborhoods, popular with first-time buyers using FHA.
Highland Park – Lower prices than nearby Pasadena or Glendale make it accessible for FHA buyers seeking walkability.
Palms – Centrally located between Culver City and Santa Monica, Palms offers condos fitting FHA limits.
North Hollywood – Close to Burbank and the Valley while more affordable than Studio City or Sherman Oaks.
Tips for Getting Approved for an FHA Loan in LA
Because of LA’s high prices and cost of living, getting approved for an FHA loan can be trickier than other parts of the country. Here are some tips:
Improve your credit – Take time to increase your score through on-time payments, lowering balances, and disputing errors.
Reduce debt – Pay down and consolidate higher interest debts like credit cards to lower your DTI ratio.
Increase your down payment – Opt for 10% or more down if possible, as larger payments help approval odds.
Bring in a co-signer – Adding someone with higher income or better credit can help you qualify if you fall short alone.
Ask about exceptions – If you barely miss FHA’s credit or DTI requirements, lenders can sometimes make exceptions, especially with strong assets or other factors.
Find a specialty lender – Mortgage brokers and smaller lenders that focus specifically on FHA loans can be more flexible than big banks.
The FHA Loan Process from Start to Finish
If you want to move forward with an FHA purchase or refinance in LA, here is a high-level overview of what to expect:
1. Get pre-approved – Work with a lender to assess your income, credit, and eligibility and obtain a pre-approval letter.
2. Make an offer – Make an offer on a home once pre-approved. FHA pre-approvals help strengthen offers.
3. Sign sales contract – Negotiate home price and terms with the seller and sign the purchase agreement when settled.
4. Submit loan application – Formally apply for the mortgage and provide documents verifying your employment, income, assets, and more.
5. Home appraisal – The lender will send out an appraiser to evaluate the property you want to purchase.
6. Final underwriting approval – Underwriters will give a final review of your full loan application and issue approval if everything looks satisfactory.
7. Closing disclosure – Three days before closing, you’ll receive a Closing Disclosure outlining final loan costs, fees, etc.
8. Loan closing – Sign your closing documents to finalize the home purchase!
Within about 45-60 days, you’ll go from pre-approval to closing on your new LA home with an FHA insured mortgage!
Alternatives to FHA in Los Angeles
While FHA is a popular choice, it’s not the only financing option available. Here are a few alternatives LA buyers might also consider:
Conventional 97 – Just 3% down like FHA, but no monthly mortgage insurance. Tradeoff is stricter approval criteria.
VA Loan – Zero downpayment option for veterans/military homebuyers. Limited to conforming loan amounts.
USDA loan – Zero down loans for properties in designated rural areas. Not common within LA city limits but an option in outskirts.
Bank Statement Loans – Alternative loans that use bank statements for income verification instead of tax returns. Helpful for self-employed buyers.
Down payment assistance – Local and state programs provide grants covering chunks of downpayment in exchange for occupying the home as a primary residence for a set period.
Seller financing – Some sellers may be willing to finance a portion of the purchase directly in order to sell their home or accept a lower price.
The Bottom Line
Despite LA’s steep prices and competition, an FHA loan can make buying a home here more feasible for buyers who might not qualify through conventional financing.
The low down payment requirement, flexible credit and debt guidelines, and high loan limits bring more options within reach. Just make sure to pick a lender familiar with navigating FHA loans in a challenging market like Los Angeles.
California FHA loan limits by county
| County name | One unit | Two units | Three units | Four units | Median sales price |
|---|---|---|---|---|---|
| ALAMEDA | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,595,000 |
| ALPINE | $503,700 | $644,800 | $779,450 | $968,650 | $438,000 |
| AMADOR | $498,257 | $637,950 | $771,125 | $958,350 | $388,000 |
| BUTTE | $498,257 | $637,950 | $771,125 | $958,350 | $284,000 |
| CALAVERAS | $498,257 | $637,950 | $771,125 | $958,350 | $375,000 |
| COLUSA | $498,257 | $637,950 | $771,125 | $958,350 | $367,000 |
| CONTRA COSTA | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,595,000 |
| DEL NORTE | $498,257 | $637,950 | $771,125 | $958,350 | $280,000 |
| EL DORADO | $763,600 | $977,550 | $1,181,650 | $1,468,500 | $635,000 |
| FRESNO | $498,257 | $637,950 | $771,125 | $958,350 | $395,000 |
| GLENN | $498,257 | $637,950 | $771,125 | $958,350 | $309,000 |
| HUMBOLDT | $498,257 | $637,950 | $771,125 | $958,350 | $395,000 |
| IMPERIAL | $498,257 | $637,950 | $771,125 | $958,350 | $310,000 |
| INYO | $508,300 | $650,700 | $786,550 | $977,500 | $400,000 |
| KERN | $498,257 | $637,950 | $771,125 | $958,350 | $335,000 |
| KINGS | $498,257 | $637,950 | $771,125 | $958,350 | $337,000 |
| LAKE | $498,257 | $637,950 | $771,125 | $958,350 | $250,000 |
| LASSEN | $498,257 | $637,950 | $771,125 | $958,350 | $190,000 |
| LOS ANGELES | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,150,000 |
| MADERA | $498,257 | $637,950 | $771,125 | $958,350 | $400,000 |
| MARIN | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,595,000 |
| MARIPOSA | $498,257 | $637,950 | $771,125 | $958,350 | $303,000 |
| MENDOCINO | $546,250 | $699,300 | $845,300 | $1,050,500 | $428,000 |
| MERCED | $498,257 | $637,950 | $771,125 | $958,350 | $390,000 |
| MODOC | $498,257 | $637,950 | $771,125 | $958,350 | $152,000 |
| MONO | $693,450 | $887,750 | $1,073,100 | $1,333,600 | $581,000 |
| MONTEREY | $920,000 | $1,177,750 | $1,423,650 | $1,769,250 | $800,000 |
| NAPA | $1,017,750 | $1,302,900 | $1,574,900 | $1,957,250 | $855,000 |
| NEVADA | $644,000 | $824,450 | $996,550 | $1,238,500 | $550,000 |
| ORANGE | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,150,000 |
| PLACER | $763,600 | $977,550 | $1,181,650 | $1,468,500 | $635,000 |
| PLUMAS | $498,257 | $637,950 | $771,125 | $958,350 | $300,000 |
| RIVERSIDE | $644,000 | $824,450 | $996,550 | $1,238,500 | $557,000 |
| SACRAMENTO | $763,600 | $977,550 | $1,181,650 | $1,468,500 | $635,000 |
| SAN BENITO | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,600,000 |
| SAN BERNARDINO | $644,000 | $824,450 | $996,550 | $1,238,500 | $557,000 |
| SAN DIEGO | $1,006,250 | $1,288,200 | $1,557,150 | $1,935,150 | $875,000 |
| SAN FRANCISCO | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,595,000 |
| SAN JOAQUIN | $656,650 | $840,650 | $1,016,150 | $1,262,800 | $565,000 |
| SAN LUIS OBISPO | $929,200 | $1,189,550 | $1,437,900 | $1,786,950 | $808,000 |
| SAN MATEO | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,595,000 |
| SANTA BARBARA | $838,350 | $1,073,250 | $1,297,300 | $1,612,250 | $729,000 |
| SANTA CLARA | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,600,000 |
| SANTA CRUZ | $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 | $1,070,000 |
| SHASTA | $498,257 | $637,950 | $771,125 | $958,350 | $340,000 |
| SIERRA | $498,257 | $637,950 | $771,125 | $958,350 | $275,000 |
| SISKIYOU | $498,257 | $637,950 | $771,125 | $958,350 | $215,000 |
| SOLANO | $685,400 | $877,450 | $1,060,600 | $1,318,100 | $590,000 |
| SONOMA | $877,450 | $1,123,300 | $1,357,800 | $1,687,450 | $763,000 |
| STANISLAUS | $517,500 | $662,500 | $800,800 | $995,200 | $449,000 |
| SUTTER | $498,257 | $637,950 | $771,125 | $958,350 | $425,000 |
| TEHAMA | $498,257 | $637,950 | $771,125 | $958,350 | $275,000 |
| TRINITY | $498,257 | $637,950 | $771,125 | $958,350 | $185,000 |
| TULARE | $498,257 | $637,950 | $771,125 | $958,350 | $340,000 |
| TUOLUMNE | $498,257 | $637,950 | $771,125 | $958,350 | $357,000 |
| VENTURA | $954,500 | $1,221,950 | $1,477,050 | $1,835,600 | $830,000 |
| YOLO | $763,600 | $977,550 | $1,181,650 | $1,468,500 | $635,000 |
| YUBA | $498,257 | $637,950 | $771,125 | $958,350 | $425,000 |
How are FHA loan limits determined?
The amount you can borrow using an FHA loan changes each year to reflect shifts in home prices across the country. The FHA sets its financing cap as a percentage of the national conforming loan limit established by the Federal Housing Finance Agency for conventional loans or mortgages that follow a list of rules created by Fannie Mae and Freddie Mac.
In 2024, the largest FHA loan someone can get for a single-family home in most parts of the country is $498,257, or 65% of the national conforming loan limit of $766,550. This amount is known as the loan limit “floor.” However, those living in more expensive areas can finance even more, potentially borrowing up to the loan limit “ceiling” amount of $1,149,825, or 150% of the national conforming loan limit.
Only buyers in Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Clara and Santa Cruz counties can access that top loan amount in California though. Residents living in 27 other counties across the state, including Butte, Fresno and Yuba, can borrow only up to $498,257, while the remaining 21 counties have a limit that falls somewhere between that loan limit floor and ceiling.
Los Angeles County FHA loan limit 2023
FAQ
What is the FHA loan limit for Los Angeles?
Do I qualify for an FHA loan in California?
Is it hard to get approved for a FHA loan?
What are the income requirements for a FHA loan?
What is a FHA loan in Los Angeles County?
Federal Housing Administration (FHA) Loans are federally insured mortgages. In Los Angeles County, loan amounts may not exceed the limits above. Conventional mortgages require a 20% down payment, high credit score, and other requirements. These Loan limits are higher than FHA limits which will allow you to purchases a larger home if you qualify.
What are the FHA loan limits in Los Angeles County?
Limits for FHA Loans in Los Angeles County, California range from $1,149,825 for 1 living-unit homes to $2,211,600 for 4 living-units. Conventional Loan Limits in Los Angeles County are $1,149,825 for 1 living-unit homes to $2,211,600 for 4 living-units. The 2024 Home Equity Conversion Mortgage (HECM) limits in Los Angeles County is $1,149,825 .
Can you buy a home with an FHA loan in Los Angeles?
In order to qualify for an FHA loan, you must be planning to live in the home. Although a loan can include some renovation costs, FHA loans cannot be used for real estate investments in Los Angeles County. Additionally, your loan amount cannot exceed the value of home you are purchasing.
What is the FHA loan limit in California?
To qualify for an FHA loan in California, your home loan must be below the local FHA loan limits in your area. For 2024, the maximum loan limit in California is $498,257 for a single-family home and $2,211,600 for a four-plex. Limits varies by county. The minimum loan limit is $5,000. Loan limits vary by county and home size.