Maximum FHA Loan Amounts For New Purchase Home Loans: What The Rules Say

• sales price, subject to certain required adjustments, or

• appraised value.

In order for FHA to insure this maximum loan amount, the borrower must make a required investment of at least 3.5% of the lesser of the appraised value or the sales price of the property.”

As you can see, this doesn’t allow a simple answer to the question, “What’s the most I can borrow with an FHA loan?” The sales price and/or appraised value, as mentioned above, play an important part in that maximum, as does the FHA loan guaranty limit for the county the property is in. The FHA loan guaranty limit doesn’t place a dollar amount limit on the loan, either, but rather limits the amount the FHA will guaranty for that loan.

For some lenders, the county loan limit may affect how much the bank is willing to lend (depending on lender policy) but these things will vary from one financial institution to another.

For some borrowers, a better question to ask might be, “How much FHA loan can I afford?” and go from there. A borrower who knows what he or she can afford a certain amount based on what they learn using a mortgage calculator goes into the house hunting process much better prepared for the entire process.

Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at FHA.com, a private company and not a government website.