2021 FHA Loan Limits
If you’re looking to get into the housing market, a Federal Housing Authority (FHA) loan might be an appealing entry point. But is an FHA loan a good fit for you? And do the properties you’re looking at fall within the 2021 FHA loan limits? Keep reading to find out.
What are FHA Home Loans?
FHA loans are government-insured mortgages designed for lower-income borrowers. They have more flexible qualifying requirements than many other types of home loans. The qualifying requirements for this type of loan are more relaxed – so if you have a low credit score or a small deposit, an FHA loan might be right for you.
There are some caveats: the property purchased must be the buyer’s primary residence, and the purchase price must be beneath the FHA loan limit. This limit varies from county to county in accordance with average house prices, and they change every year. If you live in a higher-priced area, expect your FHA loan limit to be higher than the average.
2020 is nearly over, so let’s consider the 2021 limits.
2021 FHA Loan Limits in San Diego
San Diego is a comparatively expensive county, which is reflected in the area’s home loan limit. For 2021, the FHA home loan limit for single-family homes is $753,250. That’s $51,750 higher than the 2020 limit of $701,500. In low-cost areas, the 2021 limit is just $356,362. This minimum lending amount covers 80% of all US counties.
Limits also vary with home type – see the table below.
| Single | Duplex | Tri-plex | Four-plex |
| $753,250 | $964,300 | $1,165,600 | $1,448,600 |
That limit may be too low for what you’re wanting to buy. If that’s the case, UW Funding has plenty of other home loan programs, one of which will suit you. Reach out today and we can discuss your options.
Not Sure if You Qualify?
If the properties you’re after are under the 2021 FHA loan limit – congrats! That’s one step toward FHA eligibility. And there are some common misconceptions about qualifying for an FHA loan that need to be addressed.
Firstly, you don’t need to be a first-time homebuyer. You can have owned a home before – or not – it doesn’t matter. You just need to live in the home being purchased. Secondly, the type of property you’re buying can be quite varied. You can get an FHA loan for any livable home, PUD (planned urban development), townhouse or condo (in an FHA-approved complex), and livable two-, three-, and four-unit properties.
FHA Home Loan Eligibility
With that out of the way, the other things you’ll need to consider for FHA home loan eligibility are your credit score, deposit amount, and debt load. It is possible to get an FHA loan with a deposit as small as 3.5% – and it’s possible to get one with a credit score of just 500 (with a 10% deposit). The program is designed to be flexible and get people into homes.
If that sounds good and you’d like to get moving on an FHA loan – or if you’re not sure and you just want some advice – get in touch with UW Funding. We tailor our offerings to suit you and your individual needs, and we’ll be with you every step of the way. Reach out today for a no-obligation chat to find out more.