FHA Loan Limits: What You Need to Know

If you’re planning to buy a home but are concerned about qualifying for a traditional mortgage, FHA loans could provide the solution you need. Backed by the Federal Housing Administration, FHA loans are designed to make homeownership more accessible, especially for first-time buyers and those with lower credit scores. A key component of FHA loans is their loan limits, which vary depending on where you live and the type of property you plan to purchase.

In this in-depth guide, we’ll explain everything you need to know about FHA loan limits, including how they’re calculated, their significance, and how they might impact your homebuying journey in 2025 and beyond.

What Are FHA Loan Limits?

FHA loan limits are the maximum amounts that borrowers can finance using an FHA-insured mortgage. These limits are set annually by the Department of Housing and Urban Development (HUD) and vary by county, reflecting local real estate market conditions.

FHA loan limits are categorized into two main types:

Low-Cost Areas (Floor): The minimum FHA loan limit applies to areas where housing costs are relatively low.
High-Cost Areas (Ceiling): The maximum FHA loan limit applies to areas where housing costs are significantly higher than the national average.

FHA Loan Limits for 2025

For 2025, FHA loan limits will likely follow the guidelines set by HUD, which bases these limits on the conforming loan limits established by the Federal Housing Finance Agency (FHFA). While specific numbers for 2025 may be subject to change, the general structure is as follows:

Low-Cost Area Limit: Approximately $472,030 for a single-family home.
High-Cost Area Limit: Up to $1,089,300 for a single-family home in designated high-cost regions.
Special Exception Areas: Certain areas, such as Alaska, Hawaii, Guam, and the U.S. Virgin Islands, may have higher limits due to unique market conditions.

Key Stat: According to HUD, approximately 95% of U.S. counties fall under the low-cost area limit, while the remaining 5% qualify as high-cost areas.

How Are FHA Loan Limits Calculated?

FHA loan limits are tied to the median home price in each county, with adjustments made to reflect market trends. Here’s how it works:

Median Home Price: FHA limits are generally set at 115% of the local median home price.
Conforming Loan Limit Benchmark: FHA limits cannot exceed 150% of the conforming loan limit set by the FHFA.

For example:

If the median home price in a county is $300,000, the FHA loan limit would be approximately $345,000 (115% of $300,000).
In high-cost areas, where the median home price might be $700,000, the FHA loan limit could reach $1,089,300.

Why Do FHA Loan Limits Matter?

Understanding FHA loan limits is crucial for buyers because these limits determine:

Affordability: The maximum amount you can borrow with an FHA loan.
Eligibility: Whether a specific property qualifies for FHA financing.
Market Access: In high-cost areas, higher loan limits allow buyers to enter competitive housing markets.

What Types of Properties Are Covered?

FHA loan limits vary based on the type of property you’re purchasing. For 2025, approximate limits for different property types are as follows:

Property Type	Low-Cost Area Limit	High-Cost Area Limit
Single-Family Home	$472,030	$1,089,300
Duplex	$604,400	$1,394,775
Triplex	$730,525	$1,685,850
Fourplex	$907,900	$2,095,200

This flexibility makes FHA loans a viable option for buyers interested in multi-unit properties, provided they intend to live in one of the units.

Who Benefits Most from FHA Loans?

FHA loans are particularly beneficial for:

First-Time Homebuyers: Easier qualification criteria and lower down payments (as low as 3.5%).
Borrowers with Lower Credit Scores: FHA loans accept credit scores as low as 580 for maximum financing.
Buyers in High-Cost Areas: Higher loan limits allow access to homes in competitive markets.

How Do FHA Loan Limits Compare to Conventional Loans?

FHA loans are often more accessible than conventional loans due to their relaxed requirements. However, the loan limits for FHA loans are generally lower than conforming loan limits for conventional mortgages.

For 2025, the conforming loan limit for conventional loans is expected to be around $726,200 in most areas, with higher limits in high-cost regions.

How to Determine Your County’s FHA Loan Limit

To find your county’s FHA loan limit:

Visit the HUD website or use their loan limit lookup tool.
Check for updates each year, as limits may increase based on housing market trends.

Steps to Apply for an FHA Loan

Check Your Eligibility: Ensure your credit score, income, and debt-to-income ratio meet FHA requirements.
Identify Your County’s Loan Limit: Confirm that your desired home’s price falls within the limit for your area.
Consult a Trusted Lender: Work with an experienced FHA lender like Buwalda Mortgage to guide you through the application process.

The Bottom Line

FHA loan limit play a crucial role in shaping your home buying options. Whether you’re purchasing a modest single-family home or a multi-unit property, understanding these limits can help you navigate the market with confidence.

Ready to explore your FHA loan options? Contact Buwalda Mortgage today to learn more about how an FHA loan can make your dream of homeownership a reality.