FHA Loan Limits for Maricopa County, AZ: What You Need to Know

Maricopa County located in central Arizona is home to major cities like Phoenix, Mesa, Chandler, and Scottsdale. With a population of over 4 million, it is the most populous county in Arizona. If you are looking to buy a home in Maricopa County with an FHA loan, it’s important to understand the FHA loan limits that apply.

What are the FHA Loan Limits for Maricopa County?

The FHA loan limits determine the maximum amount you can borrow with an FHA loan in a given area, Here are the FHA loan limits for Maricopa County for 2023

• 1-unit property: $530,150
• 2-unit property: $678,700
• 3-unit property: $820,350
• 4-unit property: $1,019,550

These loan limits apply to most cities and towns in Maricopa County, including Phoenix, Mesa, Chandler, Scottsdale, Glendale, Gilbert, Tempe, Peoria, Surprise, Avondale, Goodyear, Buckeye, El Mirage, and more.

The FHA loan limits are higher for Maricopa County compared to most other parts of the country, This is because Maricopa County falls under the “high cost” threshold as determined by the Federal Housing Finance Agency, Areas with higher than average home prices and closing costs get assigned higher FHA loan limits

How FHA Loan Limits Are Determined

The FHA loan limits are calculated annually and issued by the Federal Housing Administration based on changes to the conventional conforming loan limits set by the FHFA.

Here’s a quick overview of how it works:

• The baseline FHA loan limit “floor” is set at 65% of the conforming loan limit for most areas. This equals $498,257 for 2023.

• For high cost areas like Maricopa County, the FHA loan limit “ceiling” is set at 150% of the conforming loan limit. This equals $1,149,825 for 2023.

• Maricopa County falls between the floor and ceiling limits, with its own specific limits determined by the FHA.

• The conforming loan limit itself is based on changes to the average U.S. home price over the past year, as reported in the FHFA’s Housing Price Index.

• As home values rise nationally, so do the conforming loan limits and the FHA loan limits.

FHA Loan Requirements for Maricopa County

In addition to sticking to the FHA loan limits, you’ll need to meet all the standard FHA loan requirements to get approved:

• Credit score – At least 500, but 580 or higher is ideal to put down just 3.5%. Under 580 needs 10% down.

• Down payment – Minimum 3.5% down. Can be gifted or sourced from grants, savings, etc.

• Debt-to-income ratio – Under 43% is preferable, but higher may be allowed with good credit.

• Home inspection – Property must pass FHA appraisal by a HUD-approved inspector.

• Owner occupancy – You must intend to live in the home as your primary residence.

• Mortgage insurance – Required upfront and annual mortgage insurance premiums.

Meeting these requirements is essential. But the good news is FHA loans are more flexible than conventional mortgages in their qualifying criteria. The down payment and credit score requirements are lower, making them ideal for first-time homebuyers or anyone without a lot of assets.

Using an FHA Loan for a 2-4 Unit Property

One unique advantage of FHA loans is that you can use them to purchase a 2-4 unit property, not just single family homes. This can be a great option if you want to live in one unit and rent out the others.

The FHA loan limits are higher for 2-4 unit properties, as shown earlier. Here are a few other key points about using an FHA loan for a small multifamily property in Maricopa County:

• You must occupy one unit as your primary residence.

• Any rental income from other units can help you qualify by offsetting the mortgage payment.

• There is more paperwork involved in the approval process to account for rental income.

• Work with a lender experienced in FHA loans for 2-4 unit buildings.

Finding an FHA Lender in Maricopa County

As one final note, be sure to find a trusted FHA lender to work with if you want to get an FHA loan in Maricopa County. Here are some tips:

• Make sure they are HUD-approved to do FHA loans.

• Ask about their experience with FHA loans specifically in Maricopa County.

• Get quotes from multiple lenders to shop for the best rates and fees.

• Look for reviews online to learn about others’ experiences with the lender.

The FHA loan limits open doors to affordable home financing for Arizona residents. Now that you know the current Maricopa County loan limits and requirements, you can determine if an FHA loan is right for you.