In 2023, the FHA single-family loan limit was raised to a floor of $472,030 (low-cost areas) and a ceiling of $1,089,300 (high-cost areas). Limits were even higher in special exception areas like Alaska and Hawaii, reaching up to $1,633,950. These 2023 limits applied to case numbers assigned on or after January 1, 2023.
The FHA has a maximum loan amount that it will insure, which is known as the FHA lending limit. These loan limits are calculated and updated annually and are influenced by the conventional loan limits set by Fannie Mae and Freddie Mac. The type of home, such as single-family or duplex, can also affect these numbers.
The new forward mortgage loan limits for FHA case numbers assigned on or after January 1, 2023 are as follows: Single Unit Homes: $472,030 to $1,089,300 in high-cost areas, with Alaska, Hawaii, Guam, and the U.S. Virgin Islands at $1,633,950.
The FHA 85% rule refers to a past guideline for cash-out refinances limiting the loan to 85% Loan-to-Value (LTV) and a specific rule for identity-of-interest transactions (like buying from family) where borrowers couldn't finance more than 85% of the home's value unless exceptions applied, such as renting from the family member for at least six months prior. While the general cash-out LTV is now 80%, the 85% rule still applies to certain related-party sales, requiring a 15% down payment unless an exception is met, notes FHA.com.
In most of the United States, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 (or 5.2 percent) from 2024. The Housing and Economic Recovery Act (HERA) requires FHFA to adjust the Enterprises' baseline CLL value each year to reflect the change in the average U.S. home price.
How much FHA loan you qualify for depends on your income, debts, credit score, and local housing costs, but generally involves a minimum 3.5% down payment (with a 580+ score), a debt-to-income (DTI) ratio (often up to 43%), and a home price within the FHA's county-specific limits, like the 2026 range of roughly $541k (low cost) to over $1.2M (high cost). Use an FHA loan calculator by U.S. Bank and check HUD.gov for your area's limits.
The FHA "12-month rule" generally requires borrowers to have a solid payment history, ideally with 12 consecutive months of on-time payments for all debts, especially housing, before applying for a loan, though some exceptions allow for limited late payments (like two 30-day lates in 24 months) or manual underwriting for extenuating circumstances. If a borrower has significant late payments (e.g., 3+ 30-day lates, or a 90-day late) within the past year, the loan may need to be downgraded or manually underwritten to assess if it was due to disregard for finances or extenuating situations like job loss or disability, requiring more documentation.
FHA loans are not restricted to lower-income buyers, nor to first-time buyers. They are available in every state and have no income or age requirements.
A lower down payment requirement is the biggest advantage an FHA loan has over a conventional mortgage. FHA loans require as little as 3.5 percent down, making them a popular choice for buyers who haven't had time to save up a large amount of cash.
Can you get an FHA loan twice? You can take out more than one FHA mortgage loan during your lifetime. But in most cases, it's no more than one at a time. That's because the FHA wants borrowers to use the FHA loan to buy a primary residence.
Here are some FHA home loan disadvantages:
You can get an FHA loan with a fixed interest rate and a term (loan length) of 15, 20, 25 or 30 years.
Basic Eligibility Criteria
Down payment: FHA loans offer one of the lowest down payment options among home loans, allowing buyers to put down as little as 3.5% of the home's purchase price if their credit score is 580 or higher. Those with lower credit scores (500-579) will need a 10% down payment.
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The answer to this question is, "No." There are no minimum income requirements for FHA loans. However, there is often a maximum debt-to-income ratio (DTI) requirement that does affect your eligibility.
A household earning $70,000 — about $10,000 below the median U.S. salary — could comfortably afford to spend about $257,000 on a house, assuming they put 20% down on a 30-year mortgage with a 6.5% rate.
This includes a requirement to occupy the property within 60 days and have it be their primary residence for at least one year. These occupancy requirements mean that an FHA loan can't be used to buy vacation homes or rental properties.
The main cons of FHA loans are mandatory Mortgage Insurance Premiums (MIP) – both upfront and annual, which can last for the life of the loan or 11 years depending on down payment. Other downsides include strict property standards, lower loan limits in high-cost areas, higher long-term costs (especially with good credit), and limitations to primary residences only, which can make them less appealing to sellers and buyers with excellent credit seeking better conventional loan terms.
The Federal Housing Administration (FHA) administers a program of loan insurance to expand homeownership opportunities. FHA provides mortgage insurance to FHA-approved lenders to protect these lenders against losses if the homeowner defaults on the loan.