Due to the significant rise in home prices in 2020, the FHA announced on Wednesday they are increasing its 2021 loan limit in most of the U.S. to $356,362, an increase of 7.42% or nearly $25,000 over 2020’s loan limit of $331,760.
The National Housing Act requires the FHA to set single-family forward loan limits at 115% of the area median house price, subject to a floor and a ceiling. This new loan limit, or “floor,” of $356,362 is calculated at 65% of the national conforming loan limit of $548,250. This “floor” applies to areas where the 115% of the median home price is below the “floor” limit.
There are 65 “high-cost” counties in the U.S. where the median home price is much higher than the FHA’s loan limit floor, so the 2021 “ceiling” limit for these areas will be set at $822,375, a nearly $57,000 increase over last year’s total of $765,600.
For a complete list of FHA loan limits, areas at the FHA ceiling, areas between the floor and the ceiling, as well as a list of areas with loan limit increases, visit FHA's Loan Limits Page.
If you have questions about obtaining an FHA loan, contact the experts at NASB at 888-661-1982.
