FHA loans are a popular option with many home buyers because of credit standards that are more lenient. However, it’s important to be aware that FHA loan limits are different from those set for conventional loans.
FHA Loan Overview
FHA loans are a type of home loan backed by the Federal Housing Administration (FHA). They tend to be utilized by people who are first-time home buyers or have less-than-perfect credit because the standards are less stringent than conventional loans based on a guarantee from the federal government.
Because of this, it tends to be a good mortgage option if you have a lower FICO® Score or you need to qualify with a slightly higher debt-to-income ratio (DTI) in order to afford a house that will work for you and your family.
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What Are The FHA Loan Limits?
FHA loan limits put a cap on how much you can borrow based on your location. For 2023, the FHA loan limits range from $472,030 – $1,089,300 for a 1-unit residence, depending on where you live. Loan limits are set on a county-by-county basis. These limits are also higher based on the number of units being purchased.
If you want to buy or refinance a home with a mortgage higher than the local FHA loan limit, you may need to use a conventional, VA or jumbo loan. Conventional loans have nationwide limits of $726,200. The VA doesn’t set a loan limit, but lenders can set their own standards.
How FHA Loan Limits Work
For conventional loans under the regulation of the Federal Housing Finance Agency (FHFA), there’s a standard loan limit. Department of Veterans Affairs (VA) loans typically don’t have a limit, but when they do, conventional loan limits play a role. FHA loan limits are a bit more complex.
The FHA uses two main factors to determine lending limits: the area you live in and the number of units you’re purchasing. If you live in a low-cost area, the “floor” is going to be lower, whereas high-cost areas have a higher “ceiling,” which matches the local loan limits for mortgages backed by Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac back conforming loans and the minimum loan amount anyone can get through the FHA in the lowest cost areas is 65% of the national conforming limit. Of course, there are some areas with much higher limits based upon local home prices. The top national loan limit for both conforming and FHA loans is 150% of the regular conforming limit.
The FHA determines high-cost areas by the area sale prices. Because housing supply can be hard to come by in heavily populated cities, metros like Los Angeles will come with a higher ceiling than rural or suburban areas.
The lending limits can also vary depending on the number of units you’re buying. For instance, a 2-unit, 3-unit or 4-unit property will come with a higher lending limit than a 1-unit home.
FHA Loan Limits 2023
1-Unit Home | 2-Unit Home | 3-Unit Home | 4-Unit Home |
|---|---|---|---|
Low-Cost County: | Low-Cost County: | Low-Cost County: | Low-Cost County: |
$472,030 | $604,400 | $730,525 | $907,900 |
High-Cost County: | High-Cost County: | High-Cost County: | High-Cost County: |
$1,089,300 | $1,394,775 | $1,685,850 | $2,095,200 |
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The U.S. Department of Housing and Urban Development (HUD) recently announced new loan limits for Federal Housing Administration (FHA) loans. Below are the 2026 FHA loan limits for low-cost and high-cost areas.
Low-cost areas
1-unit: $541,287
2-unit: $693,050
3-unit: $837,700
4-unit: $1,041,125
High-cost areas
1-unit: $1,249,125
2-unit: $1,599,375
3-unit: $1,933,200
4-unit: $2,402,625
Kevin Graham
Kevin Graham is a Senior Writer for Rocket Companies. He specializes in economics, mortgage qualification and personal finance topics. As someone with cerebral palsy spastic quadriplegia that requires the use of a wheelchair, he also takes on articles around modifying your home for physical challenges and smart home tech. Kevin has a bachelor's degree in journalism from Oakland University.
