NEW 2022 FHA Loan Limits: How Do Rising Limits Affect You?

by | Mar 1, 2022 | FHA Loans | 0 comments

In 2022, FHA loans give borrowers a bigger budget to enjoy with higher FHA loan limits. FHA loan limits have been increased by the US Department of Housing and Urban Development (HUD) in most parts of the US.

Here is everything you need to know about the new 2022 FHA loan limits:

New 2022 FHA Loan Limits

The FHA (Federal Housing Administration) provides FHA loan limits for various home mortgage loan categories in different states, for example, for duplexes and single-family homes. 

Depending on the property type and local housing values, loan limits can vary. They are updated and calculated each year and follow guidelines set by the traditional loan limits by Fannie Mae and Freddie Mac.

An FHA-approved lender is responsible for issuing an FHA mortgage loan which is also ensured by the FHA. This loan is made for borrowers with low-to-moderate income and ensures that individuals can make use of loans with a small down payment and credit score. Many people need this to obtain other loans that are not issued or guaranteed by government agencies.

Here are the new FHA loan limits that you need to be aware of:

  • The FHA loan limit for a single unit is $420,680 in most areas and $970,800 in high-cost areas.
  • The FHA loan limit for duplexes is $538,650 in most areas and $1,243,050 in high-cost areas.
  • The FHA loan limit for triplexes is $651,050 in most areas and $1,502,475 in high-cost areas.
  • The FHA loan limit for four units is $809,150 in most areas and $1,867,275 in high-cost areas.

FHA loan limits for a single-unit home are $420,680 for a floor and go up to $970,800 for a ceiling. The more expensive an area may be, the higher the FHA loan limits are. For example, a house in San Francisco costs more than a house in Houston.

In 2022, the national conforming loan limits were $647,200 for Fannie Mae and Freddie Mac. This meant that the floor limits for FHA were 65 percent of their conforming loan equivalents. Moreover, expensive counties have a higher conforming limit. Mortgages that are beyond the limit are called jumbo loans or non-conforming loans. 

What Affects the New 2022 FHA Limits 

The FHA limits have increased because of the rising prices of homes. According to the National Housing Act, the FHA is supposed to create a loan limit for a single-family house that is 115 percent of median home prices. These loans cannot cross 150 percent of the standard limit. 

According to the Housing and Economic Recovery Act of 2009 (HERA), the floor and ceiling loan limits that FHA sets must be in sync with the loan limits that conventional mortgages set. These also need to be supported by Fannie Mae and Freddie Mac. 

The loan limits for Fannie Mae and Freddie Mac went up to $548,250 in 2021, which, in turn, boosted FHA’s floor limits by 65 percent of the conforming loan equivalents.

Most of the housing markets that enjoy high FHA ceilings are based in the Washington-Arlington-Alexandria, New York-Newark-Jersey City, and San Francisco-Oakland-Berkley metro areas. Based on NAR Q3 2020 data, San Diego, San Francisco, Honolulu, Anaheim, and San Jose have the most expensive markets.

Can You Get a Loan that is More Than the FHA Loan Limit?

Are you thinking about buying a property that is more than the conventional FHA loan limit? The good news is that you might still be able to finance your purchase using an FHA loan. The only thing is that the mortgage amount must be within the FHA loan limit, based on the area you choose. This sort of loan is also called an FHA jumbo loan.

Integrity Mortgage (NMLS #1692497) can help you with any of your FHA needs.  Contact us to learn more.

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