Conforming and FHA loan limits are increasing for 2021. The higher mortgage limits will allow home buyers to qualify for more when needed. Below we will break down the latest 2021 loan limits.
Please contact Coast2Coast Lending 7 days a week with questions by calling the number above or just submit the Quick Request Form on this page.
The Federal Housing Administration (FHA) insures mortgages issued by approved lenders This allows buyers with lower credit scores or smaller down payments to qualify for home loans. FHA loans have limits on how much you can borrow based on where you live and the type of property you want to purchase Here’s what to know about FHA loan limits for 2021.
FHA Loan Limits Basics
FHA loan limits vary by county and are determined based on home prices in your area. There are two main limits
-
Floor – The minimum limit for low cost areas. This is $356,362 for 2021.
-
Ceiling – The maximum limit for high cost areas. This is $822,375 for 2021.
Limits for specific counties fall somewhere in between. You can check your county limit on the FHA loan limits lookup tool.
These baseline limits apply to single-family homes with one unit. Limits are higher if you are purchasing a 2-4 unit home. Common examples include:
- 2-unit home: 150% of 1-unit limit
- 3-unit home: 200% of 1-unit limit
- 4-unit home: 250% of 1-unit limit
So in a high cost county with a 1-unit limit of $822,375, a 4-unit home would have a limit of $2,055,937.
Meeting FHA Borrowing Requirements
To qualify for an FHA loan, you’ll need:
- Credit score of at least 580
- Total debt-to-income ratio below 43%
- Down payment of at least 3.5%
FHA loans allow flexible credit guidelines and low down payments. But you still need to borrow below your county’s limit.
Here are some tips for staying within your FHA loan amount:
-
Put more down – Increasing your down payment percentage lowers the amount you need to finance. This gives you flexibility if your limit is tight for local home prices.
-
Buy a lower priced property – Your limit may allow less expensive homes but not higher priced ones in your desired area. Adjust your home search to match FHA borrowing power.
-
Improve your credit – A higher score within FHA guidelines can qualify you for more, allowing you to stretch against FHA limits.
-
Pay down debts – Reducing existing debts improves your debt-to-income ratio, making it easier to borrow close to FHA limits.
FHA Loan Limit Changes for 2021
FHA loan limits are reevaluated each year based on home value trends. Here are the changes for 2021:
-
The national floor increased by $24,800, from $331,760 to $356,362.
-
The national ceiling increased by $56,000, from $765,600 to $822,375.
-
Most local county limits increased as well, especially in higher cost areas.
These increases allow buyers to qualify for larger FHA loans than last year. You may now fit a more expensive home within new 2021 borrowing power.
Use the lookup tool for your specific county to see if the limit grew. Review with a lender as well to confirm your updated purchasing ability.
Alternatives If You Need to Borrow More
In some expensive areas, even increased FHA limits may not be enough to buy your target home.
You have a few options if you need to finance above FHA loan maximums:
Conforming Loans
Conforming loans meet lending limits set by Fannie Mae and Freddie Mac rather than FHA. Requirements are stricter but maximums are higher. You’ll likely need:
- Minimum 620 credit score
- Maximum 36% debt-to-income ratio
- Minimum 3% down payment
Jumbo Loans
Jumbo loans exceed conforming limits and have tougher eligibility. Expect to need:
- Minimum 700 credit score
- Maximum 43% debt-to-income ratio
- Minimum 20% down payment
Jumbos allow high amounts in costly areas but aren’t accessible to all buyers. Weigh conforming before pursuing jumbo FHA alternatives.
Improve Your Profile
Boosting your credit, income, and savings makes more types of loans attainable if FHA loans fall short. Give yourself 6-12 months to enhance qualifications before applying.
The Bottom Line
FHA loans balance flexible credit and down payment needs with borrowing limits tied to local housing markets. If you need limited financing, 2021’s higher FHA loan ceilings may newly accommodate your home purchase. But if FHA caps still don’t reach your real estate goals, alternative mortgage programs are available.
Keeping close tabs on your county’s loan limits and eligibility factors is key to understanding what an FHA loan can finance this year. Check in with lenders early about how increases impact your unique borrowing ability and housing search. This ensures you find an affordable home using the right loan for your financial profile.
Conforming Loan Limits 2021:
In most of the country, the 2021 maximum conforming loan limit for 1-unit single-family properties will be $548,250. This is nearly a 7.5% increase from last year’s loan limit of $510,400. The FHFA’s loan limits define the maximum amount that Fannie Mae and Freddie can finance for a one-unit single-family home. The loan limits increase for muti-unit properties as seen in the chart below.
In more “high cost” markets such as California and New York, the new limit will be as high as $822,375, up from $765,000 last year.
Please find the complete 2021 Conventional loan limit chart here.
These new loan limits are effective on or after January 1, 2021. This is the fifth loan limit increase in the last five years, and it will take effect in most locations in the U.S., with the exception of 47 specific counties or county-equivalents.
| Units | Contiguous States (Most States) | High Cost |
| 1 | $548,250 | $822,375 |
| 2 | $702,000 | $1,053,000 |
| 3 | $848,500 | $1,272,750 |
| 4 | $1,054,500 | $1,581,750 |
FHA Loan Limits 2021: Here’s What You Need to Know
FAQ
What are the new FHA loan limits for 2024?
Is there a limit to how many FHA loans can you have?
What are the limitations of an FHA loan?
Is there a salary cap for FHA?
What is the FHA mortgage limits page?
Welcome to the FHA Mortgage Limits page, which allows you to look up the FHA or GSE mortgage limits for one or more areas. You can list them by state, county, or Metropolitan Statistical Area. The results page will also include a Median Sale Price value for each jurisdiction. These median price estimates are used for loan limit determination.
What are the new FHA loan limits for 2022?
These new loan limits are effective for case numbers assigned on or after January 1, 2022, through December 31, 2022. Read today’s Press Release. FHA’s “floor” and “ceiling” loan limits will increase from $356,362 and $822,375 in Calendar Year (CY) 2021, to $420,680 and $970,800 in CY 2022, respectively, for a one-unit property.
How much is a 2024 FHA loan?
The maximum FHA loan amount for a property in high-cost areas (such as large metropolitan areas) for 2024 is $1,,149,,825. In lower-cost areas, the FHA limits are based on the county, but for one-unit properties, the 2024 limit is $498,,257. If you have multiple units, limits may be higher.
How much can you borrow on a home loan in 2021?
The Federal Housing Administration has increased its 2021 borrowing limits to $356,362 in lower-cost parts of the US and $822,375 in more expensive areas. You may be able to borrow more if you’re buying a multi-family home. FHA loans can be good options for homebuyers with at least a 580 credit score, 43% debt-to-income ratio, and 3% down payment.