What are the FHA loan limits for 2021?
The new FHA loan limits are very good for buyers — particularly first-time home buyers in expensive metro areas or locales with tight inventory.
“This increase allows them to look at a wider range of properties without having to qualify for a conforming loan,” states Chris Wolf, vice president of mortgage lending for Mutual of Omaha Mortgage. “Conforming loans are more restrictive with debt-to-income ratios and could potentially have a higher rate or mortgage insurance payment depending on credit.”
FHA loan limits are designated into two categories: “low cost” and “high cost” areas. Whether an area is “high cost” or “low cost” depends largely on population density and cost of living. When a large number of homes in the area far exceed the median home value, the loan limit for that locale goes up. For the low-cost areas, limits are set at 65% of the baseline conforming limit. High-cost areas can go up to 150% of the baseline.
“The conforming loan limit saw an increase of $38,000,” explains Wolf. “This is especially good for people at or near that amount, as once you go over a loan amount of $548,250, it becomes a jumbo loan with much more restrictive and onerous guidelines.”
Low-cost area limits
- Single Family – $356,362 (up from $331,760 in 2020)
- Duplex – $456,275 (up from $424,800 in 2020)
- Triplex – $551,500 (up from $513,450 in 2020)
- Four-Unit (Quadplex) – $685,400 (up from $638,100 in 2020)
High-cost area limits
- Single Family – $822,375 (up from $765,600 in 2020)
- Duplex – $1,053,000 (up from $980,325 in 2020)
- Triplex – $1,272,750 (up from $1,184,925 in 2020)
- Four-Unit (Quadplex) – $1,581,750 (up from $1,472,550 in 2020)
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