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FHA Loan Limits 2022: FHA Loans up to $2.8M

FHA Loan Limits 2022: FHA Loans up to $2.8M
Tim Lucas - Home.com
Senior Editor, Home.com

The Federal Housing Administration (FHA) sets new loan limits each year for the mortgages it backs — you know these as FHA loans.

Why the ever-changing limits? The FHA adjusts the amount it will insure based on local housing prices. FHA loan limits are pegged to 115% of the median home price in a given area, and they’re usually set according to county.

What are the FHA loan limits for 2022?

For 2022, FHA loan limits range from $420,680 to $970,800 for single-family homes and higher (sometimes much higher) for 2-4 unit homes. New limits are available on January 1 each year.

It’s important to realize, though, that FHA loan limits vary based on where you’re buying. We break down what you need to know about FHA loan limits in 2022 and how to find the limits in your area.

What's in this Article?

Who sets the FHA loan limits?
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Multi-unit homes
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FHA loan limits table
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How can I find the FHA maximum loan amount in my county?
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Who can get an FHA loan?
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How to qualify for an FHA loan
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FHA loan limits FAQs
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Who sets the FHA loan limits?

FHA loan limits are set annually by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD).

The FHA sets loan limits at 115% of the median home price in an area. FHA’s base nationwide limit, known as the “floor,” loan limit, is $420,680 for 2022. The maximum loan amount —  known as the ceiling —  for a single-family home is $970,800 .

Keep in mind that there is no minimum FHA loan amount. These figures refer to the maximum you can borrow in a given area.

And one more note, FHA has designated “Special Exception Areas,” namely Alaska, Hawaii, Guam, and the Virgin Islands. These limits are set to 150% of the “ceiling” limits. A one-unit home in these areas can be financed up to $1,456,200.

FHA loans aren’t the only mortgages with limits. The Federal Housing Finance Agency (FHFA) sets limits for conforming mortgages, which are backed by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. These are known as conforming loan limits.

For 2022, the conforming loan limits range between $647,200 and $970,800.

What happens if you want to buy a single-family home with an FHA loan for more than $420,680 in a standard area, or the higher loan limit in high-cost areas? You’ll need to consider a conforming loan or jumbo loan. Conforming loans come with a base nationwide limit of $647,200, higher than FHA’s limit. Jumbo loans technically have no limit at all, since each lender sets their own guidelines for these loans. Lenders may charge higher interest rates and require higher credit scores and bigger down payments for jumbo loans.

Both FHA and conforming loan limits vary by area. Be sure to check the limits wherever you plan to buy. You can find the FHA loan limits in your county through the HUD search tool

New 2022 loan limits for FHA loans in standard, high-cost, and special exception areas

Multi-unit homes

FHA sets higher limits if you want to buy a duplex, triplex, or four-plex. You can buy a 2-, 3-, or 4-unit home with FHA if you live in one unit. You are free to rent out the remaining units.

FHA limits for multi-unit homes are quite high. For instance, the standard limit across the U.S. for a 4-unit home is $809,150.

Limits go up from there. A 2-unit home in Los Angeles County, Calif., allows for an FHA loan of $1,243,050, and you can get a loan for $1,867,275 on a 4-unit (assuming you qualify, of course).

But a truly amazing limit comes in Alaska and Hawaii, where an FHA loan on a 4-unit home maxes out at $2,800,900.  

2022 FHA loan limits table

Property TypeFloorCeilingAK/HI
Single-unit $420,680 $970,800$1,456,200
Two-unit$538,650$1,243,050$1,864,575
Three-unit$651,050$1,502,475$2,253,700
Four-unit$809,150$1,867,275$2,800,900

How can I find the FHA maximum loan amount in my county?

Knowing the maximum loan limit in your area tells you something about your local real estate market, since those numbers correlate to housing prices. But as you’ll see in the next section, how much a lender will approve you for depends on a lot more than local loan limits.

To look up the FHA’s maximum loan amount in different U.S. counties, check out the FHA mortgage limits search tool on HUD.gov. Choose “county” in the top drop-down menu and choose your state from the second drop-down menu. Then type the name of your county. Make sure Limit Type is “FHA Forward” and Limit Year is set to “CY2022” and hit Send.

FHA county loan limits can vary significantly even within a state. In California’s San Francisco County, for example, the maximum loan amount is $970,800. But several hundred miles to the north, in Humboldt County, the FHA maximum loan amount is $420,680.

The loan limits that apply to you may change based on real estate prices in the different towns and cities where you’re house-hunting.

Are FHA limits talking about home price or loan amount?

FHA limits refer to the loan amount, not the purchase price of the home.

So if you were buying a $1 million home in an area with a $600,000 FHA loan limit, you could get an FHA loan by putting down $400,000.

However, if you had this big a down payment, you might opt for a conventional loan which requires no mortgage insurance when putting down at least 20%.

But the example illustrates that there are no FHA home price limits, only loan amount limits.

What if I’m over FHA loan limits?

Let’s look at an example of a buyer in Humboldt County, Calif., where the maximum FHA loan amount is $420,680 for 2022.

The buyer is interested in a $500,000 home. Putting 3.5% down (the minimum down payment for FHA), the loan amount comes to $482,500. This is $61,820 over the limit.

The buyer can:

  1. Make a down payment of $79,320 to get her loan amount down to local FHA limits
  2. Receive gift funds for the difference
  3. Opt for a 3% or 5% down conventional loan, which has a limit of $647,200 in this area. She would have to have a credit score above 620 for this option, and may incur higher rates and mortgage insurance depending on credit score
  4. Get a second mortgage for the amount over the local FHA loan limit ($61,820 in this case). The applicant would have to qualify for the second payment, and would need to make a down payment of 3.5% of the purchase price.

It’s not very common to be over FHA loan limits, but it does happen. Fortunately, there are workarounds if you’re creative.

Loan Bigger down payment Conforming loan 2nd mortgage
Home price$500,000$500,000$500,000
Local FHA loan limit $420,680 $420,680 $420,680
First mortgage $420,680 (FHA)$485,000 (conforming) $420,680 (FHA)
Second mortgagen/an/a$61,820
Down payment$79,320 (15.8%)$15,000 (3%)$17,500 (3.5%)

Who can get an FHA loan?

FHA loans are designed to make homebuying affordable for moderate- to low-income borrowers, so they have more flexible requirements than conventional loans.

There are no income limits or geographic requirements, though a lender will use your credit score, income, and debts to make sure you can afford a mortgage. 

To get approved for an FHA loan, you’ll need the following criteria: 

  • Credit score: 580 (or higher with some lenders)
  • Down payment: 3.5%
  • Debt-to-income ratio (DTI): 50% and sometimes higher

Some lenders may even accept a credit score of 500-579 with a 10% down payment, but not all.

The home you want to buy must also meet FHA guidelines. Borrowers can use an FHA loan to buy a single-family home or a multifamily property with up to four units.

The property must pass an appraisal with an FHA-approved appraiser, who will determine the value of the property and whether it meets the FHA’s livability standards.

How to qualify for an FHA loan

To qualify for an FHA loan, you’ll need to apply with an FHA-approved lender.

Although FHA guidelines are more flexible than those for conventional loans, there are several steps you can take to boost your chances of approval.

  • Check your credit score. The minimum credit score for an FHA loan with a 3.5% down payment is 580.
  • Figure out how much down payment you can afford. You’ll need a 3.5% down payment to qualify for an FHA loan if your credit score is 580 or higher. If it’s between 500 and 579, you’ll need to put down 10% and find a lender that allows credit scores that low..
  • Check 2021 FHA loan limits in your area. Loan approval will depend on your financial circumstances, but knowing the loan limits can set realistic expectations for how much you might be able to borrow.
  • Review your employment history. Most lenders require two years of steady employment to approve a loan, although FHA is more lenient in most cases. Organize documents such as pay stubs and tax forms so your lender can verify your employment.
  • Calculate your debt-to-income ratio. FHA lenders generally require that your total monthly debts (which include your estimated mortgage payment plus other debt obligations) are less than 50% of your gross (pretax) monthly income.
  • Get preapproved with an FHA lender. Prequalification lets you know if the bank will approve you for a loan and gives you an idea of how much house you can afford.

Once you’ve been preapproved for an FHA loan, you can start looking for houses and make an offer once you find one you love. The home will need to pass an appraisal by an FHA-approved appraiser before the lender can give full approval to the loan.

FHA loan limits FAQs

What are the new FHA loan limits for 2022?

The 2022 FHA loan limit in most areas of the U.S. is $420,680, but up to $970,800 in high-cost areas. Annual increases reflect home price increases in many areas of the country. In Alaska, Guam, Hawaii, and the Virgin Islands, the one-unit FHA loan limit is $1,456,200.

What is the maximum you can borrow on an FHA loan?

The maximum amount you can borrow on an FHA loan for a single-family home in 2022 is $420,680 in standard areas and $970,800 in high-cost areas, with many counties falling somewhere in between. In Alaska and Hawaii, the loan limit is $1,456,200. Loan limits are higher for 2-4 unit properties. The 4-unit loan limit in a standard area, for example, is $809,150 versus $420,680 for a 1-unit home.

What is the FHA loan limit near me?

FHA loan limits vary based on where you live, and they can even be very different county to county, but your limit is at least $420,680, possibly higher. You can look up the FHA county loan limits in your area using this HUD search tool. Keep in mind that you must qualify for the loan. The loan limit simply states the maximum eligible amount for the area.

What does it take to qualify for an FHA loan?

You’ll need a credit score of 580 or above to qualify for an FHA loan with a 3.5% down payment. If your credit score is 500 to 579, you may be able to qualify, but you’ll need a 10% down payment. The house itself must also pass an appraisal for soundness and safety. Your lender will arrange the appraisal with an FHA-approved appraiser.

Can FHA deny a loan?

The FHA does not lend money directly. It’s a government agency that insures loans offered by FHA-approved lenders.

FHA-approved lenders can deny a mortgage application if:

•The price exceeds loan limits
•The borrower does not meet their credit and income qualifications
•The home does not meet FHA property standards for soundness and safety

What disqualifies you from getting an FHA loan?

FHA-approved lenders look for the following qualifications when you apply for the loan. Falling short of any of these may disqualify you.

•A credit score below 580 with 3.5% down payment
•A credit below 500 with a 10% down payment (few lenders will accept credit scores below 580, however)
•An FHA loan above area limits (you can find FHA loan limits here)
•Lack of sufficient work history, usually two years or educational equivalent
•A DTI exceeding 50-55%.

Lenders can also add their own qualifications on top of the FHA guidelines, and some have more lenient criteria. It helps to apply with several FHA-approved lenders, especially if you have a spotty credit history. Speaking with a few qualified lenders can help you find one that is willing to give you a loan.

Why would a house not be approved for an FHA loan?

The loan amount must fall within FHA loan limits to receive approval. The maximum allowed loan on a single-family home with an FHA loan in 2022 is $420,680 in most areas and $970,800 for high-cost areas. Many counties fall in between these limits.

If you want to buy a single-family property for more than the loan limit in your area, you’ll need to consider a conventional mortgage or jumbo loan, or come up with the difference in cash.

The house must also meet FHA property requirements for safety and soundness, based on appraisal from an FHA-approved appraiser.

Can you buy a fixer-upper with an FHA loan?

Yes, you can, as long as the home price is within the allowed loan limits and the house meets FHA property standards. If the house does not meet standards, you can apply for an FHA 203k loan, which allows you to finance repair costs into your loan amount.

How hard is it to get an FHA loan?

You may find it easier to qualify for an FHA loan than a conventional mortgage, especially if you have a spotty credit history. FHA loans have more flexible lending requirements, including lower credit score minimums and a higher debt-to-income allowance than you might find on other loans.

But you must meet both FHA and lender credit, income, and down payment criteria to qualify. The home must also meet the FHA’s property standards.

Are FHA loans only for first-time homebuyers?

No. Roughly 83% of FHA homebuyers are first-time buyers, but FHA loans are not restricted to folks buying their first home.

I’m ready to apply

FHA loan limits tell you how much lenders are allowed to lend to FHA borrowers in their areas. But qualifying for an FHA loan — or any mortgage, for that matter — is much more personal than that.

Lenders are primarily concerned with whether you can afford a mortgage and how likely you are to pay it back. If you’re not sure whether you’ll qualify for an FHA loan but you’re ready to buy a home, the best thing you can do is ask.

By getting preapproved with a lender, you find out how much you can borrow and what types of houses you might soon be able to call a home.

   

Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA, and were not approved by a government agency.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.

Further Reading

FHA Loan Requirements 2022 | Rates & Eligibility

FHA Loan Rates Today: Are They Going Up?

FHA Multifamily Loan: Start Earning Rental Income