FHA Loan Limits

This guide will discuss the FHA loan limits for standard and high-cost counties throughout the 50 states. Each state in the nation has FHA loan limits by county. HUD, the parent of FHA, sets the annual maximum FHA loan limits in standard and high-cost counties of the U.S.

Each county in the individual state has FHA loan limits from the U.S. Department of Housing and Urban Development (HUD). HUD sets the standard and high-balance FHA loan limits.

This guide on FHA loan limits covers the standard and high-balance mortgage FHA loan limits by county. We will cover the FHA loan limits by county in all 50 states, including Washington, DC, Puerto Rico, Guam, and the U.S. Virgin Islands.

What Are the Nationwide Conforming Loan Limits?

Each state has counties that are classified as standard areas and areas that are classified as high-cost counties. HUD and the FHFA classify counties with average median prices of homes as standard areas. However, counties in each state where housing costs are above the national average are classified as high-cost areas.

FHA Loan Limits on Standard and High-Balance FHA Loans

Homes in many counties in California, Alaska, Hawaii, Guam, and the U.S. Virgin Islands exceed the median home prices of 115% of the baseline loan limits by state. They are considered high-cost areas where buyers can qualify for high-balance FHA and conforming loans.

Home prices have been surging year after year throughout the nation with no sign of a housing correction.

The Federal Housing Finance Agency (FHFA) and HUD annually evaluate home prices nationwide. FHA and conventional conforming loan limits by county are the same in all standard areas throughout the United States. However, high-balance conforming and FHA loan limits are higher than the standard conforming and FHA loan limits. High-cost loan limits by state depend on which county HUD and the FHFA consider high-cost counties.

High-Balance FHA and Conforming Loans

High-balance FHA loans have higher FHA loan limits because they are in high-cost areas. HUD and the FHFA set new maximum FHA loan limits yearly in standard and high-cost areas.

The eligibility requirements and guidelines on high-balance conforming and FHA loans are the same.

However, high-balance FHA loans have higher mortgage rates than standard FHA loans. High-balance FHA loans can come in various term options (e.g., 15, 20, or 30 years).

FHA Loans

The U.S. Department of Housing insures FHA loans. FHA loans benefit first-time homebuyers, borrowers with lower credit scores, and bad credit. These loans have more flexible qualification criteria than conventional conforming loans, making them accessible to a broader range of borrowers. HUD, the parent of FHA, requires a lower down payment and low credit scores. Homebuyers pay upfront mortgage insurance (MIP) and annual mortgage insurance premiums, which protect the lender in case of default.

Eligibility Guidelines on High-Balance Loans

In summary, conforming loans adhere to the guidelines and loan limits set by GSEs like Fannie Mae and Freddie Mac, while HUD insures FHA loans and has flexible eligibility requirements. Conforming and FHA loan limits are substantially higher than standard conforming and FHA loan limits. 

High-balance conforming loans are a variation of conforming loans with higher loan limits, primarily used in high-cost housing markets.

Mortgage guidelines on conforming and FHA high-balance mortgage loans are the same as standard conforming and FHA loans. The main difference between conforming and FHA standard loans and high-balance loans is the pricing of mortgage rates.

Mortgage Rates on FHA Loans

Mortgage rates on FHA loans are lower than rates on conventional loans. There are no loan-level pricing adjustments on loan-to-value on FHA loans.  FHA loans are insured and guaranteed by HUD. If the borrower defaults on their FHA loans, HUD will partially cover lenders from foreclosure loss.

HUD insures and partially guarantees lenders if borrowers default on their FHA loans. Mortgage rates are priced based on the borrower’s credit scores.

High-balance loans have higher pricing hits than standard conforming and FHA loans. Borrowers should consider how much house they can afford versus how much they qualify.  Borrowers should do their due diligence on the loan requirements when choosing between these mortgage options.