The loan limits for FHA loans in 2021 were released and it’s good news for home buyers. For Ohioans in Franklin and contiguous counties, the new limit is $397,900 which is up almost $25,000 from last year’s limit of $373,750.

The national average limit has been increased to $356,362. Last year’s limit was about $25,000 less at $331,760. According to, the loan limit figure is determined as a percentage of the national conforming loan limit for Fannie Mae and Freddie Mac, which is increasing in 2021 to $548,250.

The 2020 minimum national loan limit, of $356,362 is 65% of the national conforming loan limit of $548,250. This minimum applies to low-cost areas, which are counties where 115% of the median home price is less than the minimum national loan limit. Unlike 2020’s limits, there are no counties with decreasing limits. Some places including Guam, Hawaii, Alaska and the U.S. Virgin Islands have higher limits based on the higher cost of construction.

A loan from the Federal Housing Administration (FHA) is one of the most popular types of loans for homebuyers. Borrowers of these loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. Borrowers can qualify for an FHA loan with a down payment as little as 3.5% and a credit score of 620 or higher.

If you’re wondering how this change may affect your home buying process in 2021, contact us and let one of our professionals walk you through the different loan types.