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FHA loan limits in 2024: How much can you borrow?
FHA loans are government-backed mortgages that make homeownership more affordable for borrowers with limited down payment funds and less-than-stellar credit histories. However, the Federal Housing Administration (FHA) limits how much you can borrow, and the numbers change every year.
In response to the rising home prices throughout the U.S., FHA loan limits have been adjusted in 2024, and the baseline limit has increased by more than $26,000 since 2023.
Learn more: Pros and cons of FHA loans
In this article:
What is an FHA loan limit?
An FHA mortgage loan limit is the maximum amount you can borrow with an FHA loan. This number varies by county and property type. Typically, it’s lower for one-unit properties and the highest for four-unit properties. More expensive counties will also have higher FHA loan limits than areas with a lower cost of living.
Keep in mind that you typically can’t automatically borrow up to the maximum limit for your county. Lenders will determine your borrowing capacity based on your credit score, income, and other financial factors.
Read more: Best FHA loan lenders
FHA loan limits for 2024
The FHA loan max amount varies each year to reflect changes in home prices. Here’s what they look like for 2024:
How is the FHA loan limit determined?
The FHA uses a formula set by the National Housing Act to establish its floor and ceiling loan limits based on the national conforming loan limit set by the Federal Housing Finance Agency (FHFA). In 2024, the national conforming loan limit for a one-unit property is $766,550.
The lowest FHA loan limit across the U.S. in 2024 is set at 65% of the national conforming loan limit — $498,257. The FHA loan limit ceiling for high-cost areas is calculated as 150% of the conforming loan limit, which comes out to $1,149,825.
FHA vs. conforming loan limits
If you’re eyeing a more expensive property, you may want to consider taking out a conforming loan instead of an FHA loan. This is because the FHA loan limit is usually lower than the limit for conforming loans. For example, single-family homes in most parts of the U.S. have a maximum FHA loan amount of $498,257, whereas the conforming loan limit for one-unit properties is $766,550 in most counties.
FHA loan requirements
Besides loan limits, FHA loans have specific eligibility requirements you have to meet before lenders will approve your application.
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Credit score and down payment: If you have a minimum credit score of 580, lenders will typically allow as little as a 3.5% down payment. If your credit score is between 500 and 580, you’ll need to come up with a 10% down payment.
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Debt-to-income ratio (DTI): Your debt-to-income ratio refers to your required monthly debt payments in relation to your before-tax monthly income. Most FHA loan lenders prefer to see a DTI ratio below 43%, though some will accept higher DTI ratios if other aspects of your financial profile are strong.
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Income requirements: FHA loans do not have minimum or maximum income requirements, but lenders will consider other factors, such as your debt-to-income ratio and monthly expenses, to gauge your ability to afford the home loan.
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Mortgage insurance: You’ll have to pay up-front and ongoing FHA mortgage insurance premiums (MIPs) regardless of your down payment amount. The up-front MIP is typically paid at closing and the annual MIP is built into your monthly mortgage payments.
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Home appraisal. If you plan to buy a home using an FHA loan, the property must go through a type of appraisal specifically for FHA loans. The appraisers will assess your home’s value and check whether it meets the FHA Minimum Property Standards.
Dig deeper: How to remove FHA mortgage insurance premiums
Is an FHA loan right for you?
FHA loans can make homeownership more attainable if you have minimal cash savings and a credit score that could use some improvement. However, because they come with pretty stringent property appraisal standards and mandatory mortgage insurance, you may want to consider conventional mortgages first if your credit score is at least 620.
FHA loans also aren’t your only option if you don’t have 20% for a down payment. You might qualify for a VA loan or USDA loan, neither requiring any money down. In many cases, you can also get a conforming loan with as little as 3% down. Shop around with mortgage lenders to learn which type of mortgage is best for you and to compare each lender’s interest rates and fees.
Read more: FHA vs. conventional loans
FHA loan limits FAQs
What is the downside of an FHA loan?
One of the biggest downsides of an FHA loan is that you’re required to pay mortgage insurance premiums regardless of your down payment amount. You’ll pay MIP in two ways: an up-front portion due at closing and an ongoing annual MIP paid in monthly installments. The up-front MIP costs 1.75% of the loan amount, and the annual MIP varies depending on the term, size, and loan-to-value (LTV) ratio of your mortgage.
How much will the FHA approve me for?
The FHA approves loan amounts based on factors like your credit score, living expenses, assets, debt-to-income ratio, household income, and the value of the property. As of 2024, the FHA maximum loan limit for a one-unit property is $498,257 in low-cost areas and $1,149,825 in high-cost areas.
How much income is too much for an FHA loan?
You don't have to worry about making too much money to qualify for FHA loans since they don't have income requirements. However, lenders will consider other factors, such as your credit score and debt-to-income ratio, to determine your eligibility and how much to lend you.
What is the FHA loan limit in California?
FHA loans have maximum loan limits based on county. Many California counties, including Los Angeles and Orange counties, have a relatively high limit of $1,149,825 for single-family homes. The FHA mortgage limits are higher because these are high-cost-of-living areas.
What is the FHA loan limit in Texas?
Texas FHA loan limits vary by county, but in most areas, the loan limit for a single-family home is $498,257. The maximum is $571,550 for high-cost Texas counties like Bastrop and Caldwell.
This article was edited by Laura Grace Tarpley.
