Breaking: FHA loan limits are increasing for 2022
The Federal Housing Administration (FHA) offers a type of mortgage designed to expand homeownership availability to more buyers. That goal has been put to the test this year, however, as home prices have risen, increasing 13.1% from October of 2020 to October of 2021. Which is why the FHA has announced that they are raising their loan limits by nearly $65,000 for a single-family home.
The new baseline limit for single-family homes will be $420,680 in 2022, which will help borrowers find more homes within their budget in this competitive market.
What does this mean?
Starting January 1st, you may be able to get an FHA-insured mortgage for up to $970,800 for a single-unit property in certain high cost areas.
Eligible borrowers will be able to qualify for a larger loan under the favorable terms offered by an FHA loan. These include:
- Low down payment options available, as low as 3.5% or purchase price
- Lower rates than conventional loans for some options
- More loan options available for first-time homebuyers
- Minimum credit scores to be approved are generally lower
- Higher debt-to-income ratios
- Allows for 100% of down payment and closing costs in the form of gift funds
What are the updated loan limits?
The loan limits that the FHA is updating are different depending on which part of the country the home is in and how many units are in the building being purchased.
Due to the higher costs of construction, Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have even higher limits: $1,456,200 for one–units; $1,864,575 for two–units; $2,253,700 for three–units; and $2,800,900 for four–units.
Contact a Guaranteed Rate loan officer to see how much money you could borrow under these new limits today.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information.
Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture, the Federal Housing Administration or any other government agency.
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