FHA Loan Limits in Maricopa County, AZ for 2024

The Federal Housing Administration (FHA) has announced the new FHA loan limits for Maricopa County, AZ for 2024 As of January 1, 2024, the FHA loan limit for a single-family home in Maricopa County is $530,150, which is an increase from the 2022 limit of $441,600. This new loan limit allows buyers in Maricopa County to purchase larger, more expensive homes with an FHA-insured mortgage.

What Are the Benefits of FHA Loans?

FHA loans are a popular option for homebuyers in Maricopa County because they offer several advantages

• Low Down Payments – FHA loans only require a 3.5% down payment compared to the typical 20% down payment needed for conventional mortgages. This lower down payment makes homeownership more accessible.

• Flexible Credit Requirements – FHA loans are available to buyers with lower credit scores, typically 580 and above. This gives more buyers the ability to qualify.

• Lower Monthly Payments – FHA loans can feature lower monthly mortgage insurance premiums compared to other low down payment options, making the monthly payment more affordable.

• Use Gift Funds for Down Payment – Borrowers can use funds gifted from family members for the entire FHA down payment. This allows buyers without large cash reserves to still buy.

• Buy with Damage/Repairs – Homes with damage or in need of repairs can still qualify for FHA financing. The repairs can be financed into the mortgage.

Because of these advantages, FHA loans are extremely popular in Maricopa County. The new higher loan limits open up FHA financing to more expensive homes in the county.

The 2024 FHA Loan Limits for Maricopa County

The baseline FHA loan limit for most of the country is $399,000 for 2024. However, FHA limits can increase for areas where home prices are higher. Maricopa County falls into the “high cost” category, meaning limits are above the baseline.

Here are the 2024 FHA loan limits for Maricopa County effective January 1, 2024:

• $530,150 for single-family homes
• $678,700 for 2-unit properties
• $820,350 for 3-unit properties
• $1,019,550 for 4-unit properties

These limits apply to the entire county, including cities like Phoenix, Chandler, Scottsdale, Tempe, and Glendale. Properties with 1-4 units located within Maricopa County fall under these FHA mortgage limits.

The FHA loan limits increased substantially in Maricopa County from 2022 to 2024. The limit for a single-family home jumped $88,550 in just two years, allowing buyers to have FHA financing on more expensive properties.

Why Did the FHA Loan Limits Increase?

There are a few key reasons why FHA raised the maximum loan limits in Maricopa County for 2024:

Rising Home Prices

Over the past few years, home values have increased substantially in Maricopa County and across Arizona. The median sales price for a home in Maricopa County rose from $390,000 in January 2021 up to $525,000 by October 2022 – an increase of 35% in less than two years. Higher sales prices meant FHA had to raise limits so buyers could still use FHA loans.

High Demand

Maricopa County has seen strong demand from buyers during the pandemic housing boom. With low inventory, bidding wars have become common, pushing sale prices up. Strong demand meant home values appreciated rapidly, requiring FHA to boost limits.

Construction Costs

Building material and labor costs have risen significantly over the past few years. These higher construction costs result in more expensive new homes, which filters to the resale market over time. FHA loan limits needed to keep pace with increasing construction costs.

Inflation

General inflation in the economy also contributed to rising home prices in Maricopa County. Inflation hit 9.1% in June 2022, causing housing costs to appreciate rapidly. FHA had to raise limits to match inflated prices.

The combination of these factors led to a substantial boost in Maricopa County’s FHA loan limits for 2024. Higher limits allow FHA loans to be used on a larger portion of the for-sale housing stock in the county.

FHA Loan Requirements in Maricopa County

While the FHA loan limits have increased, the requirements to qualify for an FHA loan remain the same. Here are some key FHA loan requirements to know:

Minimum Credit Score: 580

Down Payment: 3.5%

Mortgage Insurance: Required when down payment is less than 20%

First-Time Homebuyer: No requirement to be a first-time buyer

Homebuyer Education: Required for buyers with credit scores below 580

Owner Occupancy: Borrower must intend to occupy the home

Loan Amounts: Vary based on type/size of property, from $530,150 up to $1,019,550

Debt-to-Income Ratio: Typically allowable up to a 55% DTI ratio

FHA loans are a great option for buyers who may not qualify for conventional mortgages. They offer more flexible credit requirements and low down payment options.

Using FHA Loans on Condos in Maricopa County

Condominiums are a popular affordable option for homebuyers in Maricopa County. FHA does insure mortgages on condos, but there are additional requirements:

• The specific condo complex must be FHA approved to allow FHA loans.

• Owner-occupancy in the complex must be over 50%.

• No more than 25% of the budget can come from commercial (non-residential) space.

• The condo must have proper insurance coverage at the complex level.

Buyers should research ahead of time and make sure the specific condo they want to purchase meets all FHA condo approval guidelines. There are over 500 FHA approved condo complexes in Maricopa County.

Next Steps for Maricopa County Buyers

If you are planning to buy a home in Maricopa County, here are some next steps to take in 2024:

• Review new FHA limits – Make sure the price of the home you want fits within the new 2024 FHA loan limits for Maricopa County based on property type.

• Check your credit – Review your credit reports and scores to ensure they meet FHA minimum requirements. Take steps to improve your credit if needed.

• Save for downpayment – The FHA minimum down payment is 3.5%, but more is better. Save enough for down payment plus closing costs.

• Get pre-approved – Work with a lender to get fully pre-approved for an FHA loan based on the new limits. This will make your offer stronger.

• Start hunting – Find a real estate agent and start looking for homes priced under the FHA limit you qualify for. Act quickly in competitive markets.

The new higher FHA loan limits open up more possibilities for Maricopa County homebuyers. If you’re considering an FHA mortgage, reach out to a qualified lender today to start the process!