2022 FHA Loan Limits — They're Barely Keeping Up With Home Values

Certified Mortgage Advisor
NMLS 1701021
January 21, 2022

Loan limits announced last November

As home values increase each year. So do loan limits, conventional loans just announced their loan limits at the end of November, and we got FHA loan limits as well. This means how big of a loan can you get with FHA loans? And it's usually set at 65% of the conventional limit.

2021 big loan limit increase

So last year in 2021, $356,360 was the 2021 base loan limit. Now in 2022, that base loan limit is jumping up to $420,680 for an 18% increase.

Max Purchase Price

Then your Max Purchase Price with the minimum down on an FHA loan, which is 3.5% down. If you have a 580 credit score and above went up by $66,000. So in 2021, the maximum purchase price with the minimum 3.5% down payment on FHA was just under $370,000. That is moving to almost $436,000 in 2022.

$66, increase purchase price

Again, a $66,000 increase in the purchase price that you can get with an FHA loan with the minimum down payment, in most counties of the US.

Different base for different location and how many units

Now this base, is going to be different based on what area you're in. So there are low-cost areas and high-cost areas. This will also change depending on how many units of a home you're looking at buying. So FHA allows for a one to four-unit primary residence home, meaning you live in the home itself.

Nationwide Mortgage Limits

Here are the low-cost areas. Here are the limits for one unit, two-unit, three-unit, and four-unit. Then we can also see the high cost.

So low-cost areas, 420,680 is what most of the US is going to be. So for high-cost areas or really dense competitive cities. That's going to run up to 4-1 units, the loan limit of 978,000.

FHA base loan limit

So then FHA loans are just barely keeping up with the appreciation that's going on right now. So again, 420,680 is the base loan limit. That means with 3.5% down as the minimum down payment, if we have a 580 credit score and above, we'd be looking at a maximum purchase price of 435,938.

So if we look at the median sale price of homes sold in the US. In quarter three of 2021 that was $404,700. So the FHA maximum purchase price with the minimum down payment is just above that. Gives you a little bit of extra wiggle room if you need it.

FHA loan limit look up

Then what you can do is go to FHA loan limit lookup. So you can put in whatever county you're in. So I'm in Montgomery County, Ohio. So you can put in your state the county and go ahead and enter that it will then show you what area you're in the one family to family, three-family, and for family. Along with the median sale price as well.

So that can be really helpful for you a way to find the purchase price based on the loan limit is what we can do is let me pull up my calculator here really quickly.

How to calculate the Max Purchase Price

So the way to find the maximum purchase price is if you know the loan amount, you can divide it by the difference of what's called the loan to value ratio. So if I know I'm putting 3.5% down, my loan amount is 96.5%. If I'm putting 10% down, my loan amount is 90%. So I can divide this by point by 0.965 to be able to find the maximum purchase price of 435,937, which I hope at 3.5% down that gives me the 420,680 base loan limit.

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