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FHA borrowers, take heart: You have a bigger budget when it comes to buying a home in 2024. The U.S. Department of Housing and Urban Development (HUD) increased FHA loan limits for most U.S. counties for this year. Here’s what to know if you’re looking for a mortgage with a low down payment.

The Federal Housing Administration (FHA) insures mortgages on primary residences only up to a certain amount — which essentially limits the cost of properties you can finance with an FHA loan. These maximums are determined at the county level. They’re adjusted annually, in much the same way that conforming loan limits are set by the Federal Housing Finance Agency  for loans backed by Fannie Mae and Freddie Mac.

2024 FHA loan limits

FHA loan limits Most areas High-cost areas Alaska, Hawaii, Guam and U.S. Virgin Islands
One-unit $498,257 $1,149,825 $1,724,725
Two-units $637,950 $1,472,250 $2,208,375
Three-units $771,125 $1,779,525 $2,669,275
Four-units $958,350 $2,211,600 $3,317,400

For single-family home loans this year, the FHA loan limits range from a floor of $498,257 to a ceiling of $1,149,835. More expensive areas outside the continental U.S. have even higher FHA loan limits.

Find FHA loan limits in your area

To help you find the limit for any county or state, we’ve listed the links to limits in each state below. HUD also has an online search tool to help you find FHA loan limits. You can search by county or state.

How are FHA loan limits determined?

The FHA calculates loan limits annually by looking at two things: the current conforming conventional loan limits and  the median price of home in an area. It uses the national conforming loan limits established by the Federal Housing and Finance Agency to set its “floor” and “ceiling.”

The FHA loan limit “floor” is 65 percent of the national conforming loan limit, and its “ceiling” is 150 percent of the national conforming limit. For 2024, the national conforming loan limit for a one-unit property is $766,550. That means the FHA loan limit is $498,257 in low-cost areas and $1,149,825 in high-cost areas.

The FHA is also required by law to set the loan limit at 115 percent of the median home sale price, subject to the national floor and ceiling. So, if a specific county has a median home price that exceeds 115 percent of the floor, the FHA loan limit is adjusted upward.

Other FHA loan requirements

Besides loan limits, FHA loans have specific requirements for borrowers that set them apart from other loans. They are:

  • Minimum credit score: 580 with 3.5 percent down; 500 with 10 percent down
  • Minimum down payment: 3.5 percent with a credit score of 580 or better; 10 percent with a credit score of 500 – 579
  • Debt-to-income ratio: 43 percent
  • Mortgage insurance: You’ll be required to pay both an upfront mortgage insurance premium (MIP) at closing and an annual MIP rolled into your monthly payment.

How to shop for a FHA loan

While FHA loans are insured by the government, they’re originated and funded by private mortgage lenders. That means the actual terms and rates are set by the individual bank, credit union or mortgage company, and can vary from lender to lender. So it pays to shop around.

Here’s how you should shop for an FHA loan:

  • Prepare your finances: Build your credit score by paying down debts on time, and start saving for a down payment.
  • Decide on term length: FHA loans come with either 15- or 30-year terms. A 15-year term means you’ll pay off the loan quicker and pay much less interest overall. However, your monthly payment will be significantly higher. A 30-year mortgage takes twice as long to pay off, but your monthly payment may be much more manageable.
  • Apply for preapproval with multiple lenders: During the preapproval process, lenders will closely analyze your finances and give you a specific maximum amount they’ll authorize lending you, at a specific interest rate. Although not final until you have a specific property in mind, this sum gives you a pretty good idea of how much of a mortgage you’ll get. Apply with several lenders simultaneously to get a sense of your borrowing power.
  • Compare offers: Once you have preapproval with multiple lenders, look at their offers. Compare the loan interest rates, as well as terms and fees.

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