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FHA loan limits are more important than most first-time home buyers think. These limits set the most money you can borrow with an FHA-insured mortgage in 2026. They range from $541,287 in most of the country to $1,249,125 in expensive places like San Francisco, Los Angeles, and New York. If you go over these limits by even one dollar, you'll have to choose from completely different loan programs with different requirements, down payments, and possibly even different results.
In December 2025, the U.S. Department of Housing and Urban Development (HUD) announced the 2026 FHA loan limits. They raised the limits by 3.26% across the board to reflect the fact that home prices are still going up across the country. According to HUD's official announcement, these new limits will apply to FHA case numbers assigned on or after January 1, 2026. This means that home buyers will be able to borrow more money because property values are going up.
I've helped thousands of people get FHA loans at AmeriSave, and I've learned that knowing these limits can make or break your search for a home. Before you start looking for a house, you need to know your local limit. You don't want to fall in love with a house you can't afford. This guide goes over everything you need to know about FHA loan limits in 2026, including how they are figured out, what they mean for different types of properties, and most importantly, what you can do if your dream home costs more than the limit in your area.
If you're a first-time buyer trying to make the FHA's low 3.5% down payment work for you or a repeat buyer who likes the FHA's flexible credit requirements, knowing how loan limits work in your county will give you a clear idea of how much you can afford to buy before you waste time looking at homes you can't afford with FHA financing.
The truth is, FHA loan limits aren't as simple as one national cap that applies everywhere. HUD sets three distinct tiers of loan limits based on housing costs in different parts of the country, and understanding which tier applies to your county determines your maximum FHA borrowing power.
The FHA floor limit applies in what HUD classifies as low-cost areas—counties where 115% of the median home price falls below the floor limit. For 2026, this floor is set at $541,287 for single-family homes, which represents exactly 65% of the 2026 conforming loan limit of $832,750 set by the Federal Housing Finance Agency.
According to HUD's announcement, this floor increased by $17,032 from 2025's limit of $524,225—a 3.26% jump that mirrors national home price appreciation. The majority of U.S. counties fall into this low-cost category, meaning most FHA borrowers nationwide are working with this $541,287 cap for single-family purchases.
Here's what I tell every borrower: the floor limit might sound low if you're shopping in markets where $500,000 barely buys you a starter home, but remember that with just 3.5% down, a $541,287 FHA loan lets you purchase a home priced up to $560,455. For many first-time buyers in affordable markets across the Midwest, South, and parts of the West, this provides plenty of buying power.
Multi-family properties have proportionally higher limits even in low-cost areas. The 2026 floor limits are:
• 2-unit properties: $693,050
• 3-unit properties: $837,700
• 4-unit properties: $1,041,125
These higher limits support house-hacking strategies where buyers purchase a duplex, triplex, or fourplex, live in one unit, and rent out the others. The rental income can often be counted toward qualifying income, making these properties more accessible than their price tags might suggest.
High-cost areas are counties where home prices significantly exceed national medians, and HUD allows FHA loan limits up to 150% of the conforming loan limit in these expensive markets. For 2026, this ceiling reaches $1,249,125 for single-family homes—an increase of $39,375 from 2025's $1,209,750 limit.
According to National Mortgage Professional's analysis published December 2025, these high-cost limits ensure FHA-insured financing remains viable in markets where housing costs have escalated far beyond national averages. Major metropolitan areas typically at or near the ceiling include San Francisco, Los Angeles, San Diego, New York City boroughs, Washington D.C., Seattle, and Boston.
The 2026 high-cost area limits for multi-family properties are:
• 2-unit properties: $1,599,375
• 3-unit properties: $1,933,200
• 4-unit properties: $2,402,625
Let me be straight with you: these high-cost limits matter tremendously in expensive markets. A $1,249,125 FHA loan with 3.5% down payment lets you purchase a home priced up to $1,294,193 in San Francisco or Manhattan. Without FHA financing at these limits, many buyers in these markets would be shut out completely, forced into conventional loans requiring 10-20% down payments that could exceed $100,000-$200,000 in cash.
The National Housing Act includes special provisions for Alaska, Hawaii, Guam, and the U.S. Virgin Islands, allowing FHA loan limits up to 225% of the conforming loan limit to account for significantly higher construction costs in these non-contiguous areas.
For 2026, HUD set the special exception limits at $1,873,687 for single-family homes—up from $1,814,625 in 2025. According to Consumer Finance Monitor's December 2025 report, this represents a $59,062 increase reflecting the continued rise in construction and housing costs in these markets.
The corresponding multi-family limits in special exception areas are:
2-unit properties: $2,399,050
3-unit properties: $2,899,800
4-unit properties: $3,603,925
These elevated limits recognize that building materials must be shipped long distances, labor costs run higher due to isolation, and overall housing markets in places like Honolulu operate at price points that would be considered ultra-luxury in most mainland markets. Without these special exception provisions, FHA loans would be virtually useless in Hawaii and Alaska where median home prices far exceed mainland averages.
Understanding how FHA loan limits are calculated helps you anticipate changes from year to year and understand why your county might have a specific limit that differs from neighboring counties. The calculation process is actually mandated by federal law through the National Housing Act, so HUD doesn't have discretion—they must follow the statutory formula.
Everything starts with the conforming loan limit set annually by the Federal Housing Finance Agency (FHFA) for mortgages that Fannie Mae and Freddie Mac can purchase. According to FHFA's November 2025 announcement, the 2026 baseline conforming loan limit is $832,750 for single-family homes in most of the United States—up $26,250 from 2025's $806,500 limit.
This 3.26% increase is based on FHFA's House Price Index, which measures the change in average U.S. home prices between the third quarter of 2024 and the third quarter of 2025. The law requires FHFA to adjust conforming loan limits by the same percentage that home prices increased nationally, creating a direct link between housing market appreciation and borrowing capacity.
Once FHFA sets this conforming loan limit, FHA applies specific percentages to derive its own loan limits for different cost categories. The truth is, this creates a cascading effect—when conforming limits rise, FHA limits automatically rise by the same proportion.
The National Housing Act establishes three key percentages that FHA applies to the conforming loan limit:
Low-cost area floor (65%): $832,750 × 0.65 = $541,287. This represents the minimum FHA loan limit regardless of how low median home prices might be in a county. Even if the median home price in rural Nebraska is $150,000, the FHA floor is still $541,287 because the formula guarantees this baseline.
High-cost area ceiling (150%): $832,750 × 1.50 = $1,249,125. This represents the maximum FHA loan limit in expensive counties on the mainland United States. The ceiling exists to cap FHA exposure in ultra-expensive markets while still providing access to government-insured mortgages.
Mid-range calculation (variable): For counties that fall between the floor and ceiling, HUD calculates limits based on the greater of either 65% of conforming limit OR 115% of median home price. This formula ensures FHA limits reflect actual local housing costs rather than applying a one-size-fits-all number.
According to The Truth About Mortgage's December 2025 analysis, this variable calculation in mid-range counties creates the phenomenon of "FHA jumbo loans"—mortgages that exceed the floor but stay below the ceiling, tailored to moderate-cost housing markets that aren't quite affordable enough for the floor but aren't expensive enough to hit the ceiling.
Here's the key trigger: HUD classifies an area as "high-cost" when the loan limit required to cover 115% of median home price exceeds the floor limit. This 115% threshold creates a buffer above median prices to ensure FHA loans can accommodate homes slightly above the median without hitting the limit.
Let me walk you through a practical example. Suppose a county has a median home price of $550,000. Multiply by 1.15 to get $632,500. With 3.5% down, you need an FHA loan of $610,362 to purchase that median-priced home. Since $610,362 exceeds the floor of $541,287, this county would have a limit above the floor—likely around $610,000-$625,000 after HUD's calculations.
However, if a county's median home price is $450,000, multiplied by 1.15 gives $517,500, requiring a loan of approximately $500,000 with 3.5% down. Since that falls below the $541,287 floor, the county gets the floor as its limit—you can actually borrow MORE than you need for the median home.
This mathematical approach means FHA loan limits adjust automatically to local market conditions without requiring congressional action or HUD discretion. The formula is the formula, and it recalibrates annually based on objective home price data.
Every year, this update process follows a predictable timeline. In November, FHFA announces conforming loan limits for the upcoming year based on third-quarter home price data from their House Price Index. Within weeks, HUD announces FHA loan limits calculated from those conforming limits. Both sets of limits take effect January 1 for case numbers assigned on or after that date.
According to HUD Mortgagee Letter 2025-23 released in December 2025, FHA loan limits must be posted on HUD's website for easy lookup by county, and lenders must apply the new limits to all FHA case numbers assigned starting January 1, 2026. If you get your case number assigned December 31, 2025, you're locked into 2025 limits. Wait until January 1, 2026, and you get access to the higher 2026 limits—sometimes a difference of thousands of dollars in borrowing capacity.
For home buyers timing purchases near year-end, this creates strategic considerations. If you're shopping in December with offers likely to close in January or February, you want your case number assigned after January 1 to maximize borrowing capacity. Smart buyers in markets where every dollar counts will work with their loan officer to time the case number assignment strategically.
One of the most confusing aspects of FHA loan limits is how dramatically they can vary between neighboring counties. You might live in a county with a $541,287 floor limit while the county 20 miles away enjoys a $650,000 limit, and the major metro county 50 miles in another direction has the full $1,249,125 ceiling. Understanding these variations helps you assess whether relocating your home search to a neighboring county might unlock better financing options.
Let's look at concrete examples from 2026 county limits. According to The Truth About Mortgage's December 2025 county-by-county analysis, Austin-Round Rock MSA in Texas has an FHA limit of $571,550 for single-family homes—barely above the $541,287 floor despite Austin's reputation as an expensive tech hub.
Similarly, Phoenix-Mesa-Scottsdale MSA in Arizona has a limit of $557,750—again, just slightly elevated from the floor. These mid-range limits reflect markets where home prices have risen but haven't reached the levels that trigger ceiling amounts. Buyers in Austin paying $570,000 for a home can still use FHA financing, but someone paying $600,000 cannot—they'd exceed the local limit and need conventional or jumbo financing instead.
Meanwhile, counties in the San Francisco Bay Area, Los Angeles metro, San Diego, and most of coastal California sit at or near the $1,249,125 ceiling. The same pattern holds in Manhattan, Brooklyn, Queens, and surrounding New York counties; King County (Seattle), Washington; and Suffolk County (Boston), Massachusetts. These high-cost designations reflect median home prices well above national averages and construction costs that far exceed what you'd pay in Phoenix or Austin.
HUD typically applies FHA loan limits at the Metropolitan Statistical Area (MSA) level rather than individual county level, meaning all counties within an MSA usually share the same limit. However, there are exceptions where suburban counties in an MSA have different limits than the core urban county.
For example, in some sprawling metro areas, the central county might have the ceiling limit of $1,249,125 while outlying suburban and exurban counties have lower limits reflecting their more affordable housing stock. This creates opportunities for buyers willing to commute longer distances—you might find a home 30 minutes farther from downtown that falls within a lower-limit county, allowing you to purchase a larger or nicer home with FHA financing that wouldn't have been possible in the high-limit county.
The truth is, these geographic variations reward buyers who do their homework. If you're focused on a specific metro area but flexible on exact location, researching county-by-county loan limits helps you identify where your FHA dollars stretch furthest.
HUD provides a searchable online tool at https://entp.hud.gov/idapp/html/hicostlook.cfm where you can enter your state and county to find your exact 2026 FHA loan limit. The tool displays limits for 1-unit through 4-unit properties, making it easy to see whether a duplex or triplex investment property falls within FHA's borrowing capacity for your area.
When using this tool, make sure you select calendar year 2026 (CY26) from the dropdown menu—the database includes historical years, and you don't want to accidentally look at 2025 or 2024 limits when planning 2026 purchases. The difference could be tens of thousands of dollars in borrowing capacity that you'd miss if you reference outdated information.
Here's what I tell every borrower: before you even start shopping for homes or talking to REALTORS®, look up your county limit. Know your maximum FHA loan amount so you can calculate your maximum purchase price (loan amount divided by 0.965 for 3.5% down). This prevents heartbreak later when you find the perfect house only to discover it exceeds your FHA financing capacity.
Your loan officer at AmeriSave can also pull your county limit instantly when you begin the prequalification process. We have access to the same HUD database and can factor your specific limit into your prequalification calculations, giving you an accurate picture of your buying power before you commit time and emotion to house hunting.
One of the most underutilized features of FHA loans is their support for multi-family properties up to four units. The higher loan limits for 2-4 unit properties open up house-hacking strategies that can dramatically reduce your housing costs while building equity—perfect for first-time buyers willing to live in one unit and rent out the others.
FHA scales its loan limits proportionally for properties with additional units. The mathematical relationship is consistent across all cost categories—two-unit limits are approximately 128% of one-unit limits, three-unit limits are approximately 155%, and four-unit limits are approximately 192%.
In low-cost areas with the $541,287 floor for single-family homes, a buyer could borrow up to $1,041,125 for a fourplex—nearly double the single-family limit. In high-cost areas with the $1,249,125 ceiling, that fourplex limit reaches $2,402,625. These elevated limits reflect the income-producing nature of multi-family properties and the additional collateral value of multiple units.
According to National Mortgage Professional's December 2025 analysis, these multi-family limits enable first-time buyers to enter the investment property market with minimal down payment. A $693,050 duplex purchased with 3.5% down requires just $24,257 in down payment—far less than the typical 20-25% down required for investor loans on rental properties.
House-hacking works like this: you purchase a duplex, triplex, or fourplex using an FHA loan with 3.5% down. You occupy one unit as your primary residence (satisfying FHA's owner-occupancy requirement), and you rent out the other units. The rental income from those units can be counted toward your qualifying income, making the property more affordable than you might think.
Let me be straight with you: this strategy can reduce your housing costs to near-zero or even negative in some markets. Suppose you buy a triplex for $650,000 in a mid-range county. You live in one unit, rent the other two for $1,500 each ($3,000 total). Your mortgage payment might be $4,200 including taxes and insurance. The rental income covers $3,000 of that, leaving you with just $1,200 in out-of-pocket housing costs—far less than you'd pay renting a standalone apartment.
Even better, FHA allows you to use 75% of projected rental income toward qualifying for the loan. If you can document that similar units in your area rent for $1,500 monthly, the underwriter will count $1,125 per unit ($1,500 × 0.75) as qualifying income. On a triplex where you'll occupy one unit and rent two, that's $2,250 in additional monthly qualifying income—often the difference between qualifying and not qualifying for the property.
Before you dive into house-hacking with FHA financing, understand the practical realities. You're committing to be a landlord, which means tenant screening, lease agreements, maintenance requests, and occasional conflicts. You'll need separate utilities for each unit or submeters to divide costs fairly. You'll handle property management yourself or pay 8-10% of rent to a property manager.
FHA also requires that multi-family properties meet specific condition standards. Each unit must have its own kitchen and bathroom, separate entrances (or clearly defined shared spaces), and adequate soundproofing between units. The property must pass FHA appraisal requirements, which are stricter than conventional appraisals regarding safety and habitability.
Additionally, finding multi-family properties within FHA loan limits can be challenging in expensive markets. A duplex in San Francisco that qualifies for the $1,599,375 two-unit ceiling (high-cost areas) is still pushing $1.6 million—requiring $56,000 down with 3.5% down payment. While that's far less than 20% down ($320,000), it's still a significant cash requirement for most first-time buyers.
The truth is, house-hacking with FHA loans works best in markets where multi-family properties are common and prices stay within FHA limits. Midwest and Southern markets often offer duplexes and triplexes in the $300,000-$500,000 range—perfect for FHA's low-cost area limits and manageable down payments under $20,000.
Just because you're within your county's FHA loan limit doesn't guarantee approval. FHA loans come with specific borrower requirements that apply whether you're borrowing $200,000 or $1,200,000. Understanding these qualification thresholds helps you assess whether FHA is the right program for your situation before you invest time in the application process.
FHA allows lower credit scores than conventional financing, but there are still minimums. At AmeriSave, we require a minimum 580 FICO score to qualify for 3.5% down payment. Borrowers with credit scores between 500-579 can still get FHA financing, but they must put down 10% rather than 3.5%.
Let me be straight with you: that 500-579 range with 10% down is rarely used in practice. By the time you've saved 10% down payment, you might qualify for conventional financing anyway with better terms and no mortgage insurance for life. The real FHA sweet spot is 580+ credit score with 3.5% down—that combination gives you maximum accessibility with minimum cash required.
Credit score requirements don't scale with loan amount. Whether you're borrowing $150,000 in a rural county or $1,200,000 in Manhattan, the 580 minimum applies equally. FHA doesn't impose stricter credit requirements for larger loans the way some conventional programs do with jumbo financing.
If your credit score falls below 580, focus on credit improvement before applying for FHA financing. Strategies include paying down credit card balances below 30% utilization, disputing inaccuracies on your credit report, making all payments on time for at least six months, and avoiding new credit inquiries that temporarily lower scores. A few months of focused credit work can move you from 560 to 590, unlocking 3.5% down payment eligibility and saving you tens of thousands in upfront cash.
Your debt-to-income ratio compares your total monthly debt payments to your gross monthly income. FHA guidelines allow DTI ratios up to 57% for borrowers with compensating factors, though most lenders are more conservative. At AmeriSave, we cap FHA loans at 57% DTI, which is actually quite flexible compared to conventional financing that typically maxes at 43-50%.
To calculate your DTI, add up all monthly debt payments: your future mortgage payment including taxes and insurance, FHA mortgage insurance premium, car loans, student loans, credit card minimum payments, personal loans, and any other recurring obligations. Divide that sum by your gross monthly income, multiply by 100, and you get your DTI percentage.
Example: You earn $6,000 monthly gross income. Your future mortgage payment will be $1,800, you have a $400 car payment and $200 in student loan payments. Your total monthly debt is $2,400. Your DTI is $2,400 ÷ $6,000 = 40%. You're well within the 57% maximum and likely to qualify.
However, if that same $6,000 income must cover $1,800 mortgage, $500 car payment, $700 student loans, and $400 in credit card minimums, your total is $3,400, giving you a 56.67% DTI. You're at the edge of qualifying, and any additional debt or income reduction could push you over.
The truth is, borrowers pushing 55-57% DTI should carefully consider affordability beyond just qualifying. FHA will approve you at these high ratios, but that doesn't mean it's comfortable or sustainable. Life happens—car repairs, medical bills, job changes—and when you're spending 57% of gross income on debt, there's very little cushion for the unexpected.
FHA's signature feature is the low 3.5% down payment requirement with 580+ credit score. This down payment applies to the purchase price, not the loan amount—an important distinction that confuses many first-time buyers.
If you're buying a $500,000 home with 3.5% down, you need $17,500 in cash for the down payment. Your loan amount will be $482,500. But you'll also need funds for closing costs, which typically run 2-5% of loan amount ($9,650-$24,125 on a $482,500 loan). All told, expect to bring $27,000-$42,000 to closing on that $500,000 purchase.
FHA allows down payment funds to come from various sources: personal savings (most common), gift funds from family members (very common for first-time buyers), down payment assistance programs through state housing agencies or nonprofits, seller concessions up to 6% of purchase price toward closing costs (but not down payment), and grants from employer or community organizations.
What FHA does NOT allow: unsecured borrowed funds like personal loans or credit card cash advances. The down payment must be your own verified funds or properly documented gifts—you can't borrow the down payment and add that debt to your loan qualification.
FHA loans require two types of mortgage insurance: upfront mortgage insurance premium (UFMIP) and annual mortgage insurance premium (MIP). The upfront premium is 1.75% of your loan amount, rolled into the loan balance at closing. On a $500,000 FHA loan, that's $8,750 added to your loan balance—you're actually borrowing $508,750 total.
Annual MIP ranges from 0.45% to 1.05% of your loan balance depending on loan amount, loan-to-value ratio, and loan term. For most borrowers with 3.5% down on 30-year loans, expect 0.85% annual MIP. On a $500,000 loan, that's $4,250 annually or approximately $354 per month added to your mortgage payment.
Here's the part that catches many borrowers off guard: FHA mortgage insurance lasts for the life of the loan if you put down less than 10%. It doesn't drop off at 78% loan-to-value like conventional PMI. The only way to eliminate it is refinancing to a conventional loan once you have 20% equity, or paying off the FHA loan entirely.
If you put 10% or more down on an FHA loan, MIP drops off after 11 years. But very few borrowers use FHA with 10% down—at that point, conventional financing becomes more attractive with no lifetime mortgage insurance and potentially better rates.
After helping thousands of borrowers through this decision, I always emphasize that lifetime MIP is the primary drawback of FHA financing. You're paying that extra $350-400 monthly forever unless you refinance. Run the numbers carefully: sometimes a conventional loan with 5-10% down and PMI that drops off at 80% LTV saves you money long-term despite requiring more cash upfront.
FHA loans are exclusively for primary residences—you must occupy the property within 60 days of closing and maintain it as your primary home for at least one year. This prevents investors from using FHA's low down payment for rental properties or second homes.
The 60-day move-in requirement is strict. If you're buying a home in another city before relocating for a job, you'll need documentation proving the job transfer and showing you'll move within 60 days. If you're buying a fixer-upper that needs work before it's livable, you must complete repairs and move in within 60 days—FHA won't extend this timeline.
After one year of owner occupancy, you can move out and keep the FHA loan in place. Many house-hackers use this strategy: buy a duplex with FHA, live there for one year, then move to a new primary residence and keep the first duplex as a rental property. You can even get another FHA loan for the new primary residence (though this requires careful underwriting and legitimate reasons for the second FHA loan).
Vacation homes, investment properties, and properties you won't occupy don't qualify for FHA financing. Period. If you need financing for those property types, look at conventional loans (20-25% down), portfolio loans from local banks, or specialized investor financing programs.
The moment your loan amount exceeds your county's FHA limit, you're out of FHA territory. There's no partial FHA loan, no hybrid option, no way to use FHA for part of the purchase and something else for the rest. You either fit within the limit or you need different financing altogether.
But exceeding FHA limits doesn't mean you're out of options. Let me walk you through the alternatives so you can make an informed decision based on your specific financial situation and the property you want to buy.
The simplest solution is putting more money down so your loan amount falls within FHA's limit. Suppose you're buying a $580,000 home in a county with a $541,287 limit. With 3.5% down ($20,300), you'd need to borrow $559,700—exceeding the limit by $18,413.
If you increase your down payment to $38,713 (6.67%), your loan amount drops to exactly $541,287—within the limit. You've preserved FHA financing by adding $18,413 to your down payment. Whether this makes sense depends on whether you have the extra cash available and whether FHA's terms (lifetime mortgage insurance, 580 credit score minimum) are worth accessing versus switching to conventional financing.
According to Neighbors Bank's December 2025 analysis, this down payment adjustment strategy works well when you're only slightly over the limit—within $20,000-$30,000. Beyond that gap, you're putting so much down that conventional financing becomes more attractive anyway since you're approaching 10% down payment territory where conventional loans offer competitive terms.
Conventional loans backed by Fannie Mae and Freddie Mac have their own conforming loan limits ($832,750 for 2026 in most areas, $1,249,125 in high-cost areas). If your loan amount exceeds FHA limits but stays within conforming loan limits, conventional financing is usually the logical next option.
The truth is, conventional loans require higher credit scores (typically 620 minimum, 740+ for best rates), offer higher down payments (minimum 3% but 5-10% more common for competitive rates), and charge private mortgage insurance until you reach 80% loan-to-value—but that PMI drops off automatically, unlike FHA's lifetime mortgage insurance.
For buyers with good credit (680+) and 5-10% down payment saved, conventional financing often costs less monthly than FHA despite the higher down payment requirement. You avoid lifetime mortgage insurance, potentially get better interest rates, and build equity faster with the higher down payment.
Run the numbers both ways with AmeriSave's mortgage calculator. Compare FHA with 3.5% down against conventional with 5% or 10% down. Factor in the total monthly payment including mortgage insurance, then multiply over 5-10 years to see which costs less long-term. Many buyers find that saving an extra year to accumulate 10% down for conventional saves them $50,000+ over the life of the loan compared to jumping into FHA immediately.
If your loan amount exceeds both FHA limits and conventional conforming limits, you're in jumbo loan territory. Jumbo loans are mortgages that exceed the conforming loan limit and aren't backed by Fannie Mae, Freddie Mac, or FHA—they're portfolio loans that lenders hold or sell to private investors.
Jumbo loans typically require excellent credit (740+ minimum, 760+ for best rates), higher down payments (10-20% depending on loan amount and lender), more extensive income documentation and reserve requirements (often 6-12 months of mortgage payments in savings after closing), and slightly higher interest rates than conforming loans.
In high-cost markets like San Francisco, Manhattan, or Southern California where median home prices exceed $1.5 million, jumbo loans are standard financing tools rather than exotic products. If you're buying a $2 million home in these markets, you need jumbo financing—there's no way around it since you've blown past both FHA and conforming loan limits.
AmeriSave offers jumbo loan programs for qualified borrowers. The key is understanding that jumbo underwriting is more rigorous—lenders scrutinize income stability, debt ratios, assets, and credit history more carefully because these loans carry more risk without government backing. If you have strong financials, jumbo loans are accessible and often come with competitive rates, just higher qualification bars than FHA or conventional financing.
Two government-backed programs offer alternatives to FHA without the same loan limits: VA loans for qualifying veterans and active military, and USDA loans for rural and suburban properties.
VA loans technically have no maximum loan amount—they're limited by your VA entitlement and the property's appraised value, not by government-imposed caps like FHA. With full entitlement, veterans can borrow well above FHA limits without down payment in many cases. VA loans also charge no mortgage insurance, offer competitive rates, and allow 100% financing—dramatically better terms than FHA in most scenarios.
USDA loans are limited to specific rural and suburban areas designated by the USDA, and they have household income limits based on area median income. However, USDA loans have no maximum loan amount and allow 100% financing with no mortgage insurance premium (just a guarantee fee). For properties in USDA-eligible areas, this beats FHA hands down.
If you're a veteran or buying in a USDA-eligible area, check these options first before committing to FHA. The terms are simply better, and you're not constrained by FHA's loan limits. Work with a loan officer who understands these programs—at AmeriSave, we can determine your VA entitlement or USDA eligibility and show you exact numbers for comparison.
The most you can borrow from the FHA depends on where your property is and how many units it has.
The 2026 floor limit for single-family homes in low-cost areas is $541,287. In places where property values are much higher than the national median, the ceiling is $1,249,125. Alaska, Hawaii, Guam, and the U.S. are some of the special exception areas. The Virgin Islands have even higher limits of $1,873,687 to cover the cost of building.
For properties with more than one family, the limits go up in a proportional way. For example, two-unit properties can cost anywhere from $693,050 to $1,599,375, three-unit properties can cost anywhere from $837,700 to $1,933,200, and four-unit properties can cost anywhere from $1,041,125 to $2,402,625.
HUD Mortgagee Letter 2025-23, which came out in December 2025, says that these limits are 3.26% higher than they were in 2025, showing that home prices are still going up across the country.
To find the limit for your county, go to HUD's loan limit lookup tool at https://entp.hud.gov/idapp/html/hicostlook.cfm and search by state and county. Choose the year 2026 to see current limits instead of data from the past.
Your loan officer at AmeriSave can also tell you your exact county limit during prequalification. We can do this because we have instant access to HUD's database and can include your local limit in our calculations of your buying power.
Keep in mind that FHA loan limits are based on the amount of the loan, not the price of the home. If you put down 3.5%, the maximum purchase price is the loan limit for your county divided by 0.965. A loan limit of $541,287 means that you can buy something for up to $560,780 with 3.5% down.
The National Housing Act says that the Federal Housing Finance Agency sets conforming loan limits every year, and these limits are used to figure out FHA loan limits. The FHFA uses its House Price Index to look at changes in home prices.
For 2026, they found that house prices went up an average of 3.26% between Q3 2024 and Q3 2025. This meant that the baseline conforming loan limit went up by the same percentage, from $806,500 to $832,750.
FHA then uses certain percentages to set this conforming limit. For low-cost areas, 65% makes the floor limit ($832,750 × 0.65 = $541,287), for high-cost areas, 150% makes the ceiling limit ($832,750 × 1.50 = $1,249,125), and for Alaska, Hawaii, Guam, and the U.S. Virgin Islands, 225% makes special exception limits. The Virgin Islands ($832,750 × 2.25 = $1,873,687).
For counties that are between the floor and ceiling, HUD sets limits based on the higher of 65% of the conforming limit or 115% of the median home price. This 115% limit makes sure that FHA loans can cover homes that are just above the median without going over the limit. When the loan limit needed to cover 115% of the median home price is higher than the floor, the area is considered high-cost. These areas get custom limits between the floor and ceiling based on the actual cost of housing in the area.
FHFA said in November 2025 that this calculation process makes sure that loan limits automatically change based on what is happening in the local market, so Congress doesn't have to do anything. The formula is based on facts and is updated every year based on real home sales data from all counties and Metropolitan Statistical Areas in the country.
The timeline is clear: FHFA announces conforming limits in November, HUD releases FHA limits in December, and both of these limits go into effect on January 1 for case numbers given on or after that date. This gives lenders and borrowers time to get ready for the new limits before they go into effect.
No, you can't get an FHA loan that is more than the limit in your county. FHA limits are hard caps set by federal law. There are no exceptions, no partial FHA loans, and no hybrid options that use FHA for part of the loan and something else for the rest.
You need different financing if the amount of money you need to borrow is more than your county's FHA limit by even one dollar.
But if you go over FHA limits, you have a few options.
First, you can lower the amount of your loan by raising your down payment. If you're only $15,000 to $30,000 over the limit, adding that much to your down payment will keep you in FHA territory. Neighbors Bank's analysis from December 2025 says that this strategy makes sense if you're close to the limit and really want FHA's low credit score requirements or want to keep cash on hand for other things.
Second, you can switch to conventional financing, which has higher conforming loan limits ($832,750 baseline, $1,249,125 in high-cost areas for 2026). Conventional loans need higher credit scores and usually 5–20% down, but they automatically cancel PMI at 80% LTV, which is not the case with FHA loans that have lifetime mortgage insurance.
Third, jumbo loans are available for qualified borrowers with excellent credit (740+), large down payments (10–20%), and strong income documentation, even if they go over the normal conforming limits.
Fourth, if you're a veteran, there is no hard limit on the amount of money you can borrow with a VA loan. Your VA entitlement and the value of your property are what set the limit, not government caps. USDA loans for eligible rural properties also don't have a maximum loan amount.
The most important thing is to know your options before you fall in love with a house. Let me be clear: finding out you can't use FHA after you've already put a lot of money into a property is very disappointing. First, check your county's limit. Then, figure out the most you can spend based on that limit and shop accordingly. If you need more buying power than the FHA can give you, talk to AmeriSave about conventional or jumbo options before you start looking for a house.
No, FHA's basic qualification requirements don't change based on the loan amount. For example, whether you're borrowing $200,000 or $1,200,000, the minimum credit score, debt-to-income ratio, down payment percentage, and mortgage insurance requirements are all the same.
For FHA loans with 3.5% down at AmeriSave, you need at least a 580 FICO score. If you have a score between 500 and 579, you can qualify with 10% down, but this is very rare in practice.
The highest debt-to-income ratio is 57%, which means that your total monthly debt payments can't be more than 57% of your gross monthly income. These limits are the same for all FHA loan amounts.
The down payment requirements are also the same: 3.5% of the purchase price if your credit score is 580 or higher, or 10% if your credit score is between 500 and 579. The percentage stays the same, but the dollar amount goes up with the price. For example, a $250,000 home needs $8,750 down (3.5%), and a $1,000,000 home needs $35,000 down (3.5%).
Mortgage insurance works the same way: there is a 1.75% upfront premium added to the loan, and then there is an annual premium of 0.45% to 1.05% based on the size of the loan, the loan-to-value ratio, and the term. Most people who borrow $300,000 or $1,000,000 and put down 3.5% pay 0.85% annual MIP for 30 years.
The truth is that FHA doesn't require stricter underwriting for bigger loans, which is something that conventional lenders often do with jumbo financing. There are no extra income documents needed for large loans, no minimum credit score requirements that go up as you borrow more, and no reserve requirements that go up as the loan amount goes up.
The fact that FHA qualification is the same for all loan amounts makes it appealing to people with good incomes but low credit scores who are buying expensive homes. If a borrower makes $200,000 a year, has a credit score of 600, and puts down 5%, they might not be able to get a conventional loan for a $1,000,000 purchase, but they could be able to get an FHA loan if the loan limits are met.
FHA loans are different from regular loans because they have the same qualification standards for all loan amounts. In contrast, jumbo loans have much stricter requirements than conforming loans.
Your loan balance doesn't change if home values go down after you take out an FHA loan. You still owe the full amount you borrowed, no matter what your home's current market value is.
When you owe more on your mortgage than the house is worth, you are said to be "underwater" or "upside down" on your mortgage. Your FHA loan's terms, interest rate, and monthly payment stay the same even if you are underwater. Your mortgage stays the same as agreed.
But it makes your choices very limited. You can't sell the house unless you bring cash to the closing to make up the difference between the sale price and the amount you owe on the loan. You can't refinance into a conventional loan because you don't have the 20% equity that conventional refi programs need. You can't sell the property or get out of the FHA loan until home values go back up or you pay down enough principal to have positive equity again.
The 2008–2012 housing crisis taught us that borrowers who bought homes with a small down payment (3.5% on FHA) at peak prices quickly went underwater when the market corrected by 20–30%. People who kept making payments eventually got their money back when the markets improved, but people who didn't lost their homes to foreclosure.
FHA offers some protection through streamline refinance programs that don't require equity verification—if rates drop significantly, you can refinance to a lower rate even if underwater, though this doesn't solve the negative equity problem.
Keeping strong equity cushions is the best way to avoid going underwater. FHA lets you put down 3.5%, but if you have the money, you might want to put down 10–20%. This equity buffer means that home prices can drop 10–15% before you go underwater.
Also, think about how long you plan to stay in the home. If you plan to stay for 5–10 years or more, temporary changes in value don't matter as much because you're not selling.
I always tell borrowers this after helping thousands of them: real estate goes in cycles. Values go up and down, but they tend to go up over time. If you buy with 3.5% down at the peak of a hot market, you should know that there is a chance that values will drop before you build equity. If you're worried about that risk, save more for a down payment or wait until the market settles down.
The FHA loan itself won't trap you; your underwater equity position will.
FHA loans are only for primary residences, and most people only have one primary residence, so FHA usually only lets you have one FHA loan at a time.
There are, however, some special cases where you can have two FHA loans at the same time. Moving for work is the most common exception. If you move more than 100 miles for work and it becomes too hard to get to your current home, you can get a second FHA loan for a new primary residence in your new work location while keeping your current FHA loan. You need to show proof of the job transfer and show that the distance or commute makes it impossible to keep your current home as your main residence.
Another exception is if your family size grows. If your current FHA-financed home is too small because you have more kids or take in elderly parents, you may be able to get a second FHA loan on a bigger property. This needs proof that your current home doesn't have enough room.
If you co-borrowed on an FHA loan with someone who doesn't live with you (like a parent helping you qualify) and you want to move out and set up your own primary residence, you may be able to get a second FHA loan while the first loan stays in the co-borrower's name and you are still responsible for it.
People who have been divorced can also qualify. If you and your ex-spouse were both on an FHA loan and your ex-spouse kept it in the divorce, you can get a new FHA loan for your own primary residence even though you're still technically on the first loan until it is refinanced.
HUD rules say that these exceptions need a lot of paperwork and approval from an underwriter—they're not automatic. If you still owe money on the first loan, you must show that you have valid reasons and the means to make both mortgage payments.
A lot of people in these situations find that getting a regular loan for their second home is more flexible than trying to get a second FHA loan.
The truth is that having two FHA loans at the same time is technically possible, but it's complicated and often not needed. You can move out of an FHA-financed home after the first year and keep the loan in place, even if you buy another home with a different type of financing. You can rent out your first FHA home while getting a conventional or VA loan for your next primary residence. This is a cleaner way to handle two FHA loans.
FHA loan limits are based on conventional conforming loan limits, but they are usually lower or equal to those limits, never higher.
For 2026, the baseline conventional conforming loan limit for single-family homes in most areas is $832,750. The FHA floor is $541,287, which is 65% of the conforming limit. In places where the cost of living is high, both FHA and conventional loans can go up to $1,249,125, which is 150% of the baseline conforming limit.
This means that the highest FHA and conventional limits are the same, but the lowest ones are different. In a statement from FHFA in November 2025 and a response from HUD in December 2025, it was made clear that this relationship is required by law. FHA must set its limits as certain percentages of the conforming limits set by FHFA.
What this means in real life is that FHA borrowers in most counties where the floor applies can borrow less money than conventional borrowers. With conventional financing, someone in a low-cost county can borrow up to $832,750, but with FHA, they can only borrow $541,287. That's a difference of $291,463.
In high-cost counties at the ceiling, FHA and conventional both max out at $1,249,125, which means they can both lend the same amount. The main difference isn't the limits themselves in high-cost areas; it's the qualification requirements.
FHA loans accept credit scores as low as 580, while conventional loans usually require scores between 620 and 740, depending on the loan details. FHA loans only require 3.5% down, while conventional loans usually require 5% to 20%. Finally, FHA loans have lifetime mortgage insurance, while conventional loans' PMI drops at 80% LTV.
Another difference is that VA loans don't have a hard maximum loan amount (only limited by property value and entitlement), and USDA loans don't have any limits in eligible areas. In some situations, these government programs are more flexible than FHA limits.
If you need to borrow more than $541,287 in a cheap county, you'll probably need conventional financing. The only exceptions are if you're a veteran or buying in a USDA-eligible area.
FHA's lower limits in these counties show that it is not a luxury home financing tool but rather a program for first-time home buyers. FHA stays competitive in high-cost areas up to the $1.25 million limit. After that, you need jumbo financing, no matter what type of program you have.
The phrase "FHA jumbo loan" is a bit misleading because it doesn't mean loans that are bigger than FHA limits. Those aren't FHA loans at all.
FHA jumbo loans are loans in counties where the floor is $541,287 and the ceiling is $1,249,125. This means that the loans are above the basic floor but below the maximum ceiling.
Neighbors Bank's December 2025 report says that these mid-range county limits make it hard to tell if loans are "jumbo" compared to the national floor but still meet the requirements for standard FHA financing.
As an example, the FHA limit for single-family homes in Austin, Texas, is $571,550 in 2026. In Austin, a $565,000 FHA loan is technically an FHA jumbo because it is more than the $541,287 floor but less than the $1,249,125 ceiling.
These loans follow all the FHA rules, such as the same 580 credit score minimum, the same 3.5% down payment, the same mortgage insurance, and the same requirements for getting approved.
The term "jumbo" is mostly just a word. Some lenders treat mid-range county loans a little differently by asking for more detailed property inspections or a second appraisal review, but the main FHA requirements are still the same.
Not all lenders offer FHA loans in every county. Some lenders stay away from mid-range counties because of their own risk policies or portfolio management needs. If you live in a county with a mid-range limit, you should ask your lender directly if they will do FHA loans at your local limit or if they only do FHA loans up to the national floor.
In fact, real jumbo loans, which are loans that are bigger than both FHA and conventional conforming limits, are completely different from each other. You need to put down 10% to 20% of the price, have a credit score of 740 or higher, show proof of income, and have 6 to 12 months of reserves after closing. They have different rates, different standards for underwriting, and different levels of risk.
Don't mix up FHA loans in mid-range counties with real jumbo loans just because some lenders use that word. You need real jumbo financing, not an FHA jumbo, if the amount of your loan is more than the FHA limit in your county. This difference is very important for cost and qualification.
Be clear about where your property is and how much you want to borrow when you work with AmeriSave. We'll let you know if you meet FHA limits for your county, if we call it standard or jumbo FHA, and what that means for your application. Being clear about the terms you use will help you avoid confusion when you compare loan estimates later.
The FHA loan limits affect refinancing in different ways depending on whether you are doing an FHA streamline refinance or a cash-out refinance.
When you do an FHA streamline refinance, you refinance an existing FHA loan to a lower rate without taking out any money and with very little paperwork. Loan limits don't apply. You can streamline refinance your current FHA loan balance even if it is higher than the limit in your county.
This is very important for people who bought a home years ago when FHA limits were higher than they are now in their county, or for people who have been paying down their principal but now find that their home value has dropped. Streamline refinances don't have to follow loan limits because you're refinancing existing FHA debt instead of taking out new debt.
FHA cash-out refinances, on the other hand, where you refinance to a higher loan amount and take cash out of your equity, must follow the current FHA loan limits. You can't use FHA to cash-out refinance to $575,000 if your county's limit is $541,287 and you want to do so. This is true no matter how much equity you have. You would need a home equity loan or a regular cash-out refinance.
HUD says that this limit only applies to the new loan amount after the cash-out, not the cash you get. If you owe $400,000 and want to refinance to $500,000 (getting $100,000 in cash minus closing costs), the $500,000 must be within your county's FHA limit.
This is a problem for borrowers who got FHA loans when limits were higher and now want to cash out and refinance in an area where limits have dropped or stayed the same while home values have gone up. You may have a lot of equity, but you can't get to it through FHA cash-out refinancing because the new loan amount is higher than the current limits. You need to do a conventional cash-out refinance.
If you have streamlined refinanced several times over the years and your balance is now higher than your county's current limit because you rolled in upfront mortgage insurance premiums, you can still streamline refinance again because your existing balances are grandfathered. However, you can't cash out or switch to rate-and-term refinancing that would raise the balance.
If you have an FHA loan and want to refinance, the truth is that you should check your county's current limit against the amount you want to borrow. You have some freedom if you stay within the limits. If you go over your limits, streamline refinancing will protect you, but cash-out options need regular financing.
Work with AmeriSave to see how both scenarios would play out. In some cases, conventional cash-out refinancing offers better terms because you might be able to get rid of FHA mortgage insurance for good and get lower rates if you have good credit and equity.
There is no one-size-fits-all answer to this question. It depends on your local market, how quickly you need to buy, and what you want to achieve.
Most years, FHA loan limits go up as home prices go up. However, waiting for higher limits can cost you in a number of ways.
First, if you wait a year for limits to go up by 3–5%, home prices in your area might go up by 4–8%, which would cancel out any benefit from the higher limit.
Second, interest rates change all the time. For example, rates could be 1% higher next year when limits go up, which would mean that your monthly payments would be much higher than the amount you can borrow.
Third, in competitive markets, the best properties sell quickly. If you wait for higher limits, you will miss out on current inventory and chances.
The FHFA's data shows that home prices go up 3.26% every year across the country. This means that the $541,287 floor in 2026 could become $559,000 in 2027. However, homes that cost $550,000 now could cost $575,000 then, and rates could go from 6% to 6.5%. You'd actually be worse off.
But in some situations, it makes sense to wait. If you're $50,000 over your county limit and need 4–6 months to save up more money for a down payment, waiting until the limits go up could help you make up the difference. If rates are at all-time highs and everyone thinks they will go down a lot, waiting 6 to 12 months could save you thousands of dollars a month. If prices are falling or staying the same in your area, it makes more sense to wait for the market to correct itself than to rush to buy at peak prices.
Let me be honest with you: it's almost impossible to perfectly time the market. If you find a home that meets your needs and is within the current FHA limits, buying it now will lock in that chance. If rates go down or your equity goes up, you can always refinance later or do a cash-out refinance.
On the other hand, if you're way over the limit in your county, waiting for limits to catch up is probably a waste of time. It's better to look into conventional or VA financing now than to hope that limits go up 15–20% in one year.
After years of working with buyers, I can tell you that you should focus on your own situation instead of trying to guess when rates will go up, when limits will go up, or when the market will be right.
Are you able to make the payment without any trouble? Does the house meet your needs for five years or more? Is the price fair for your area? If you answered yes to all three, buy now with the limits you have. If you're stretching your budget too thin, can barely make the payments, or the house is a compromise, it might be better to wait. You might be able to get better deals, either because your limits have gone up or because you have more time to save and improve your financial situation.
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