January 5, 2012
FHA loans do not have a set dollar amount limit across the board. Instead, FHA loans have a limit established yearly on a by-county basis. There is an average FHA loan limit, and varying amounts for high-cost counties. These amounts are subject to change through legislation, FHA policy or other factors.
Regardless of the FHA loan limit per county, there may be other restrictions on the maximum amount an FHA mortgage applicant may borrow. For example, a borrower may not qualify for the maximum financing available due to credit issues or other factors. In some cases the lender may approve an FHA insured loan, but not the maximum. The borrower may be required to place a larger down payment in these instances.
Another limiting factor that can affect the loan amount? The type of transaction. FHA rules state, “Certain types of loan transactions affect the amount of financing available to a borrower and how the maximum mortgage amount is calculated.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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