If you’re among the thousands of Americans looking to buy their first home with an FHA loan, then your first step is finding how much you can borrow.

There are many requirements for an FHA-backed mortgage. Among them is a maximum loan amount for each type of property — from single-family homes to four-unit structures.

The Federal Housing Administration releases new guidelines each year. The good news for FHA loan limits 2021? Federal documents show an increase in most of the country over the previous year.

Read on as we drill down on the specifics of the FHA loan limits that will simplify the complicated process of buying your first home with a government-guaranteed mortgage.

The Basics of an FHA Loan Limit

An FHA loan is a home mortgage insured by the federal government. If a homeowner defaults on the loan, the FHA steps in to help the lender.

FHA loan limits are the highest amount a potential homeowner can borrow under each type of property. Ensuring homeowners borrow within these limits is part of the FHA loan application process.

The maximum loan limits depend on where the home is located.

For instance, a single-family home in a low-cost area would have a loan limit of $356,362 while a four-unit house located in a high-cost area would allow borrowers to mortgage up to $1.5 million.

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Changes in FHA Loan Limits 2021 

The federal government adjusts the FHA loan limits each year. Under the FHA loan limits for 2021, the base and maximum loan amounts went up.

The annual adjustments are based on two things: the home values of the area you want to move to and the type of property you want to buy.

For 2021, as median home prices increased across the country over the previous year, the FHA followed suit and raised the ceiling for mortgages for most areas of the country.

There are many FHA loan programs that review borrowers’ loan limits and help them through the application process.

Looking Up Your Max FHA Loan Limit 

Before you fill out an application to qualify for FHA loan approval, consider looking up the FHA max loan amount for your metropolitan area.

The Department of Housing and Urban Development releases the FHA loan limits each year, based on an area’s housing values. For 2021, the loan limits for single-family homes ranged from $356,362 to $822,375, depending on where the home is located.

The loan limits are broken down by county and here is an easy way to look up the FHA mortgage limits for your area.

Know Your FHA Loan Limits Before Applying 

An FHA loan is a great way for first-time homebuyers who have a low credit rating and not a lot in savings to become homeowners.

But before you apply, it’s important to find out about FHA loan limits 2021.

The FHA responded to rising home values and raised loan limits across the country. That means borrowers have more money to work with when they go house-hunting.

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