FHA Loan Increases 2020

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 580 or higher.

With the increase in home prices and the popularity of FHA loans, the FHA has raised the loan limits for 2020. The base loan limit is $331,760 for lower cost areas and a limit of $765,600 in high cost areas. That loan limit applies to much of the country and is determined as a percentage of the national conforming loan limit for Fannie Mae and Freddie Mac, which is also seeing an increase in 2020 to $510,400.

Due to the nature of the housing market, there are a few counties seeing a decrease in their FHA loan limits and some areas of the country that are getting more of an increased due to their higher construction costs.

If you’re wondering how this change may affect your home buying process in 2020, contact us and let one of our professionals walk you through the different loan types.