When applying for a mortgage, a popular option is a loan backed by the Federal Housing Administration (FHA) because of its lenient eligibility requirements. However, FHA loans come with annual loan limits that restrict how much house a borrower can buy. In Ohio, the FHA loan limit in 2024 for a single-family home is $498,257 — except in high-cost areas, where the maximum is $546,250.
The FHA mortgage program opens the door to homeownership for many buyers in Ohio. FHA loans require just a 3.5% down payment and have flexible credit standards.
But there are specific requirements you must meet to qualify for FHA financing in Ohio In this comprehensive guide, we’ll explore
- Overview of FHA loans
- FHA credit score requirements
- Debt-to-income limits
- Down payment rules
- Ohio FHA loan limits
- Homebuyer education
- Next steps for pre-approval
Understanding these key FHA mortgage rules is crucial to get approved. Let’s dive into the details.
FHA Loan Program Overview
FHA loans are government-insured mortgages aimed at low-to-moderate income buyers. Some key facts
- Insured by the Federal Housing Administration (FHA)
- Offered by private lenders
- Require just 3.5% down
- Allow gift funds for down payment
- Have flexible credit guidelines
Low down payments and lenient credit make FHA financing popular, especially for first-time home buyers. Now let’s look at specific credit requirements.
FHA Credit Score Requirements in Ohio
Your credit score is a key factor in FHA loan approval Here are the credit score requirements
Minimum Credit Score: 580
- But most lenders require 620+ for best rates
Ideal Credit Score: 700+
- Scores of 680+ get the lowest rates
- 700+ scores unlock the best pricing
So you can get approved with lower credit scores starting at 580. But your interest rate will be much higher compared to buyers with scores of 700 or above.
Boosting your credit before applying is recommended to get the best FHA mortgage rates.
FHA Debt-to-Income (DTI) Limits
Your total monthly debt payments compared to income is called DTI. FHA has maximum DTI limits:
Max FHA DTI: 55%
- Up to 55% of gross monthly income
This measure your entire monthly debt load – including the new mortgage payment. Keeping your DTI at 55% or lower is key for approval.
FHA Down Payment Options in Ohio
Coming up with just 3.5% down makes FHA loans affordable. Here are the down payment options:
Minimum Down Payment: 3.5%
- Of the purchase price
- From your own funds
Maximum Down Payment: 100%
- You can put down more, up to the full price
- But minimum is 3.5%
Gifts from family and your own savings can fund the down payment. The minimum invest gets you in the door with an FHA loan.
Ohio FHA Loan Limits
FHA sets maximum mortgage limits based on local home values. Loan limits vary by county in Ohio.
Here are the 2024 FHA loan limits for several Ohio counties:
| County | 1-Unit Limit |
|---|---|
| Franklin County | $546,250 |
| Cuyahoga County | $498,257 |
| Hamilton County | $498,257 |
| Montgomery County | $498,257 |
| Summit County | $498,257 |
The highest FHA limit statewide is $546,250 in Franklin County. You can finance up to 100% of the FHA limit based on your pre-approval amount.
Homebuyer Education
FHA requires first-time buyers in Ohio complete homebuyer education. You take a class with a HUD-approved counselor on:
- Budgeting
- Credit
- Shopping for a home
- Obtaining a mortgage
Many classes are free or low-cost. You can take them online, in-person, or by phone. Shop around to find the best option for your schedule.
Completing education early helps you feel prepared. But classes can be finished even after you start the mortgage process.
Next Steps to FHA Pre-Approval
Now that you know the guidelines, here are next steps to take:
- Check your credit score and report
- Pay down debts to lower DTI
- Save for your down payment
- Research homes in your price range
- Contact lenders for pre-approval
This prep work will put you in a strong position to both qualify and find the right home.
Frequency of Entities:
FHA loan: 16
Down payment: 6
Credit score: 6
Debt-to-income: 4
Loan limits: 4
Homebuyer education: 3
How are FHA loan limits determined?
Each year, the FHA resets the loan limits according to the guidelines listed in the National Housing Act. To do so, it uses a percentage of the national conforming loan limit set by the Federal Housing Finance Agency (FHFA) for conventional mortgages guaranteed or owned by Fannie Mae or Freddie Mac.
The FHFA set the 2024 national conforming loan limit at $766,550 for the purchase of a one-unit property. To set the “floor,” or the lowest maximum loan amount, the FHA took 65% of this amount, or $498,257. Most counties in the country utilize this loan limit. For areas where the cost of living is higher, the FHA set a “ceiling,” or highest loan amount limit, of $1,149,825, which is 150 percent of the national conforming limit. In areas in Alaska, Hawaii, Guam and the U.S. Virgin Islands where building costs are even higher, the ceiling could be higher.
How to qualify for an FHA loan in Ohio
To qualify for FHA loans in Ohio, homebuyers will need to share employment history, a record of income and other personal and financial information. While eligibility requirements can be less stringent than those with a conventional mortgage, borrowers still have to demonstrate an ability to repay the loan as well as pay a down payment and all closing costs when finalizing the property purchase. As such, lenders will review the following:
→ Credit score: For borrowers paying 3.5% down on the loan, the minimum credit score is 580; the minimum credit score drops to 500 for borrowers paying 10% down.
→ Debt-to-income (DTI) ratio: DTI ratio refers to your total monthly debt divided by your gross monthly income. The maximum DTI ratio for FHA loans is 43%; for borrowers with high credit scores and sufficient cash reserves, the DTI ratio could be higher.
→ Mortgage insurance: FHA loans require borrowers to pay for mortgage insurance to help offset the risk that comes with lower down payment and credit score requirements. Borrowers are required to pay for both upfront and annual mortgage insurance premiums.
→ Income limits: There are no income limits for FHA loans.
→ Residency: All FHA borrowers must use the property as their primary residence for a minimum of one year.
→ Cash reserves: If borrowers have fair or poor credit, the lender may require them to maintain a minimum amount of cash reserves to cover several months of mortgage payments.
The Good and BAD of FHA Loans | NEW FHA Loan Requirements 2023
FAQ
What do you need for a FHA loan in Ohio?
What will disqualify you from an FHA loan?
Is it harder to qualify for an FHA loan?
Can I get an FHA loan in Ohio?
To qualify for an FHA loan in Ohio, your home loan must be below the local FHA loan limits in your area. For 2024, the maximum loan limit in Ohio is $498,257 for a single-family home and $1,050,500 for a four-plex. Limits varies by county. The minimum loan limit is $5,000. Loan limits vary by county and home size.
What are Ohio FHA loan limits?
Ohio FHA loan limits vary by county, from $498,257 for single-family homes in most areas to $546,250 in more expensive metro areas.
Where can I find conforming loan limits in Ohio?
Bankrate compiled the conforming loan limits data from Federal Housing Finance Agency and the FHA loan limits from the U.S. Department of Housing and Urban Development (HUD). View the current FHA and conforming loan limits for all counties in Ohio. Each Ohio county loan limit is displayed.
What are the FHA loan requirements?
FHA loan requirements include a minimum credit score of 500 as well as limits on your total monthly debt load. Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page.