FHA Raises 2021 Loan Limits

Housing Finance

The Federal Housing Administration (FHA) has announced its loan limits for 2021. The nationwide rise in median home prices indicates most buyers across the country will see increases.

The Federal Housing Finance Agency increased annual loan limits by 7.42% in 2021 based on changes to the national median home prices.

Therefore, the FHA floor will increase from $331,760 to $356,362 for single-family home loans. The FHA national low-cost area mortgage limit of $356,362 is set at 65% of the national conforming limit of $548,250. The base limit applies to areas where 115% of the area median home price is less than $356,362.

The FHA high-cost ceiling is 150% of the national conforming loan limit and will increase from $765,600 to $822,375 for single-family home loans. High-cost areas are those where 115% of the median home price is greater than the floor ($356,362). In these areas, the limit equals 115% of the median home price up to the FHA ceiling ($822,375).

The following table lists the 2021 FHA loan limits for low-cost and high-cost areas:

Property Size Low-Cost Area “Floor” High-Cost Area “Ceiling”
One-Unit $356,362 $822,375
Two-Units $456,275 $1,053,000
Three-Units $551,500 $1,272,750
Four-Units $685,400 $1,581,750

The 2021 FHA loan limits by Metropolitan Statistical Area (MSA) or county can be reviewed on FHA's loan limits webpage.

FHA also increased the loan limits for its Home Equity Conversion Mortgage (HECM), or reverse mortgage program, from $765,600 to $822,375. FHA HECM program regulations do not allow loan limits to vary by MSA or county, so this limit applies to all mortgages regardless of location.

For more information, contact Curtis Milton at 800-368-5242 x8597.

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