Comprehensive Guide to FHA Loan Limits

This guide covers a comprehensive guide to FHA loan limits and how it affected homebuyers. We are going to write an update of this guide on HUD lowers FHA loan limits and how it affected homebuyers which was published on 2014. This new guide is an updated guide from the old article that was originally written and published. We will keep the original guide in our GCA FORUMS NEWS archives. Today, HUD loan limits on FHA loans have increased every year for the past decade. In the following sections of this guide, we will cover a comprehensive guide to FHA loan Limits.

Comprehensive Guide to FHA Loan Limits 2025: What You Should Know

Home prices have surged over the last few years, so in 2025, the FHA loan limits were revised to account for that. Those changes aimed to give more home-buying opportunities to first-time home buyers and people with lower wages. Today, this blog will review the new FHA loan limits for 2025, discuss how they differ from previous years, and discuss what borrowers should do to benefit from these new limits.

Comprehensive Guide to FHA Loans Limits: What are Loan Limits?

FHA loan limits cap the amount borrowed under an FHA-insured loan scheme.

Comprehensive Guide to FHA Loan Limits: The Loan Limits Differ Based on the Following Criteria

• County or Metropolitan Area—Higher-cost areas have higher loan limits.
• Property Type—Limits differ for single-family, duplexes, triplexes, and four-unit properties.
• HUD calculates the FHA loan limits every year based on the limits set by HUD.

Comprehensive Guide to FHA Loan Limits for 2025

The Comprehensive guide o FHA loan limits for 2025 were adjusted to address the ongoing increase in home prices throughout the country.

Comprehensive Guide to FHA Loan Limits: Key Highlights Include:

Based on the latest data comprehensive guide to FHA loan limits from the U.S. Department of Housing and Urban Development (HUD), here are the updated FHA loan limits for 2025:

Type Low-Cost Area “Floor “High-Cost Area “Ceiling” Special Exception Areas (Alaska, Hawaii, Guam, U.S. Virgin Islands)

• One-Unit $524,225 $1,209,750 $1,814,625
• Two-Unit $671,200 $1,548,975 $2,323,450
• Three-Unit $811,275 $1,872,225 $2,808,325
• Four-Unit $1,008,300 $2,326,875 $3,490,300

These limits are effective for FHA case numbers assigned on or after January 1, 2025. For more detailed information, you can refer to HUD’s official announcement.

Comprehensive Guide to FHA Loan Limits: Low Cost Areas (Floor)

• The minimum FHA loan limit (floor) for a single-family unit in less expensive regions is $524,225.
• This is an increase from $498,257 in 2024.

Comprehensive Guide to FHA Loan Limits: High Cost Areas (Ceiling)

• Single-family homes in high-cost areas have a maximum FHA loan limit (ceiling) of $1,209,750.

Comprehensive Guide to FHA Loan Limits: Special Exception Areas

• Housing is much more expensive in states like Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
• It can surpass the national ceiling by 150% of FHA Loan limits.
• This means that in 2025, the limits will exceed $1,633,950 for a single-family house in these regions.

Comprehensive Guide to FHA Loan Limits: Multifamily Properties

Limits for duplexes, triplexes, and fourplexes are also increased. In high-cost regions, the loan limit for a four-plex property is $2,100,000 for higher-priced zones.

Comprehensive Guide to FHA Loan Limits: How FHA Loan Limits Are Calculated

A percentage of the conforming loan limit specified by the FHFA is always used as a determinant of FHA Loan limits. For 2025, the numbers are:

• Floor Limit: 65% of the national conforming loan limit.
• Ceiling Limit: 150% of the national conforming loan limit.

This assures that FHA loans are available to borrowers even in low-cost and high-cost regions.

• Benefits of Higher FHA Loan Limits Increased Buying Power:  Borrowers can obtain larger loans, which allows them to buy homes in expensive markets.
• Accessibility: First-time buyers and buyers with modest incomes have better chances of entering the housing market.
• Flexibility for Multifamily Investments: Buys more duplexes, triplexes, or fourplexes, which can provide rental income
• Competitive Interest Rates: More affordable ownership since FHA loans generally have lower interest rates.

For the updated loan limits in 2025, borrowers must meet FHA eligibility requirements:

• Credit Score Requirements: At least 580 for a 3.5% down payment, Or 500 – 579 with a 10% down payment.
• Debt to Income Ratio (DTI):  46.9% front-end and 56.9% back-end in most cases.
• Down Payment: Low 3.5% heightens affordability for first-time buyers.
• Primary Residence: The borrower is required to occupy the property.
• Mortgage Insurance Premium (MIP): An upfront and annual MIP requirement exists.

Comprehensive Guide to FHA Loan Limits vs. Conventional Loans

• In 2025, FHA loan limits were adjusted again.
• Conventional loans also increased.
• However, loans through FHA have easier credit scores and down payment criteria.
• Conventional loans may be more suitable for people with good credit.
• Still, FHA loans are the best for people with lower credit scores or limited resources.

Comprehensive Guide to FHA Loan Limits: The Effects on Housing Markets of Elevated Loan Limits

• Increased Demand: Elevating loan limits heightens demand in expensive regions, which might sustain or raise home values.
• Affordability Challenges: While limit increases might benefit borrowers, home prices and the lack of available houses remain challenging.

Comprehensive Guide to FHA Loan Limits: Opportunities for First-Time Buyers

• FHA loans are one of the easiest forms of financing for new market participants.
• FHA’s limits for 2025 address the changes in the housing market.
• With these new adjustments, borrowers can now access more reasonable financing options in historically more expensive regions.
• Knowing these shifts makes decision-making easier if you’re a first-home buyer or wish to purchase a multifamily house.
• Contact a trusted mortgage expert to learn more about qualifying for FHA loans.

I have included a link to the original blog on comprehensive guide to FHA loan limits post written in 2014 for your reference. The topic is comprehensive guide to FHA Loan Limits for the year 2014.

Here is the old article on HUD lowers FHA loan limits:

Old article written and published on 2014 on Gustan Cho Associates

2014 is just less than two weeks away and there will be new mortgage regulations with HUD. FHA Lowering Loan Limits will definitely affect homebuyers throughout the United States where home prices have been appreciating double digits every year. Fannie Mae and HUD will be imposing new rules and regulations. The United States of Housing and Urban Development (HUD) is the parent of FHA. One of the most critical ones is that the Federal Housing Administration, FHA, will be lowering FHA loan limits starting 2014. In this article, we will discuss and cover HUD lowers FHA loan limits and how affected homebuyers.

Maximum FHA Limits Reduced: HUD Lowers FHA Loan Limits

The Federal Housing Administration recently declared new rules which lower single-family residential FHA mortgage loans for 650 counties across the United States which could impact home buyer’s borrowing power on FHA insured mortgage loans. This includes all counties throughout the United States except for counties classified as high-cost areas

HUD Lowers FHA Loan Limits and How it Affected Homebuyers in Chicago

Effective January 1, 2014, the Federal Housing Administration will cap FHA loan limits for residential single-family homes to $365,700 in Chicago and surrounding suburbs. The current maximum FHA loan limits are set at $410,000

FHA Loan Limits For Multi-Unit Residential Properties

FHA loan limits for two units, three units, and four units are also being lowered.

1. For two units, FHA loan limits are $468,150.
2. For three units FHA loan limits are reduced to 565,900.
3. Four units, FHA loan limits are lowered to $703,250

FHA also announced earlier this year that they will be increasing the annual mortgage insurance premiums again on FHA insured mortgage loans by an additional 010% of the FHA mortgage loan balance amount. FHA has consistently increased mortgage insurance premiums in the past few years. FHA also requires that FHA insured mortgage loan borrowers carry FHA mortgage insurance premium over the life of the FHA mortgage loan. Before, FHA allowed homeowners to be able to cancel FHA mortgage insurance premium as long as their loan to value was at 78% as long as they carried mortgage insurance premium for 5 years.

Federal Housing Administration

The Federal Housing Administration is controlled and administered by the United Department of Housing and Urban Development, also known as HUD. FHA does not originate loan directly to the public. FHA .provides mortgage lenders mortgage insurance on mortgage loans that meets the Federal Housing Administration guidelines and criteria. HUD makes homeownership possible to first time home buyers and folks with less than perfect credit by allowing them to only put 3.5% down payment. HUD is being understanding to borrowers who have had prior bad credit and credit issues such as foreclosures, bankruptcies, deed in lieu of foreclosure, and short sale.

Role of the Federal Housing Administration

The Federal Housing Administration provides mortgage insurance to mortgage lenders who meet the agency’s lending rules, regulations, and guidelines. FHA insured just under 40,000 residential homes back in 2007 and in 2010, the Federal Housing Administration insured almost 200,000 mortgage loans. The first three quarters of 2013, the Federal Housing Administration has insured just under 100,000 residential mortgage loans. The Federal Housing Administration has recently released that they were short of funds and needed to request an advance of $2.0 billion dollars from the United States Treasury in order to replenish the FHA insurance fund due to mortgage insurance payments that it needed to pay due to residential mortgage loan defaults.. Housing prices have dramatically increased throughout the country some cities seeing double-digit increases from 2012.

FHA Loan Limits and New HUD Guidelines

Although FHA will bring new FHA guidelines for 2014, FHA insured mortgage loans are still a Godsend mortgage program that enables Americans the chance of homeownership. FHA allows and makes homeownership possible for folks who have had periods of bad credit. FHA allows those who have filed bankruptcy and had prior foreclosures have an opportunity to become homeowners again. FHA allows Americans a second chance for homeownership. Make homeownership possible for all hard-working Americans with very little down payment.

Qualifying For Home Loans With High Loan Limits

With HUD Lowering FHA Loan Limits, GCA Forums Mortgage Group has created and launched NON-QM Loans and Bank Statement Loans where there are no loan limits. Homebuyers who cannot qualify for FHA Loans due to the reductions in Loan Limits can qualify for NON-QM Loans. Non-QM Loans are portfolio loan programs where 10% to 20% is required and mortgage rates are higher than traditional government and/or conventional loans. Bank Statement Mortgage Loans For Self Employed Borrowers requires no tax returns and there are no loan limit caps. Either 24 months of personal and/or business bank statements are averaged to derive to monthly income. If the borrower uses business bank statements, then only 50% of the bank statement deposits can be used. If borrowers use personal bank statements, then 100% of the deposits can be used. Contact us for more details.

Qualifying For Mortgage With a Lender With No Overlays

FHA mortgage borrowers who need to qualify with a five-star mortgage lender with no lender overlays, please contact us at GCA Forums Mortgage Group. The team at GCA Forums Mortgage Group are available 7 days a week, evenings, weekends, and holidays. Please contact us at GCA Forums Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at GCA FORUMS Mortgage Group is available seven days a week, late evenings, weekends, and holidays.

This guide on a comprehensive guide to FHA loan limits was rewritten and updated on January 28th, 2025.