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FHA Loan Limits 2021

The FHA Federal Housing Administration announced the nations new loan limits for 2021. For most of the country these loan limits have increased. The new FHA loan limits are effective January 1, 2021. Lets run through what “loan limits” mean and how they work.

Introduction - What is An FHA Loan?

The FHA (Federal Housing Administration) provides insurance on loans made by FHA approved direct lenders around the country and in all US territories. The FHA does not provides loan directly but insures loans that are provided by direct lenders so long as they follow FHA underwriting guidelines. 

A few of the FHA lending guidelines.

  • Minimum credit score of 500 -Requires 10% down
  • Minimum credit score of 580 -3.5% down
  • The house must be your primary residence
  • Debt to income ratio must be 43% or less -DTI or Debt to income adds up your debts (mortgages, credit cards, student loans and other obligations) and divides that by your gross income. If your DTI is below 43% then you qualify for an FHA loan. Some lenders like ours allow for a higher DTI which can provide you with a better opportunity to qualify. 
  • The borrower must have a steady income. Two years or more of income with proof in the form of W2s or tax returns.

The FHA is the largest insurer of residential mortgages in the world.

Introduction - What is The FHA Loan Limit?

What if the FHA Limit exceeds?

In comparison to the 2020 FHA Loan Limits, the 2021 loan limits have increased. The US federal government has said that their biggest priority is to ensure that the households are well within their residents’ reach. Furthermore, they should be in a position to afford it. Therefore, they have created a roadmap to ensure that they provide relief to their people. Even though it has provided a mixed bag of views, we highlight the FHA Loan Limits 2021 for single-family units below:

1.     The limit floors

The floor gets defined as the loan limit for those US-based areas where the household costs are low. According to the FHA statistics, the FHA loan limits of 2021 are approximately $356,000, which is roughly $25,000 more than what it was last year. The increase is highlighted comprehensively in the media.

2.     The limit ceiling

If you live in US-based areas where households are expensive, you can afford to borrow more money. According to the FHA statistics, the FHA limit ceiling of 2021 is approximately $822,000, roughly $57,000 more than last year. This significant rise has brought smiles to the middle-class people in the United States. They feel that they can finally have a stable life to pay off their household debts without rushing into anything.

Before finalizing anything, the people have to consider that these limits are just for those associated with the single-family units. A person can take out an FHA loan and purchase a home for four-family terms. Your amount and your FHA limit will depend on the demands that your purchased house has.

Your country’s loan limit is likely to come in between the limit floors and the limit ceiling. You can look into the FHA website for more clarification. However, they are still showing the numbers for 2020, which creates confusion for the FHA loan people.


The FHA Loan Limits have divided opinion among the residents of the USA. The middle-class people have strongly regarded the loan limits very highly. They consider it as “affordable” as they can finally prioritize more than just their households with their salaries. However, the US government has said that people can be optimistic about what lies ahead. They have promised relief to their residents in the future.

The residents must know what is best for their family. Furthermore, the companies should notify the residents about the FHA limits’ calculations to meet the financial demands comprehensively


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