2019 FHA loan limits rise in most areas of the U.S.

2019 FHA loan limits: good news for many

The FHA announced its new mortgage limits for 2019, and they are higher. The lowest of 2019 FHA loan limits, which apply in much of the country, increased from 2018’s $294,515 to $314,827.

In addition, the FHA increased its limits for high-cost areas.

FHA maximum loan amounts in low-cost areas

The limits in most of the country are as follows:

• One-unit: $314,827
• Two-unit: $403,125
• Three-unit: $487,250
• Four-unit: $605,525

Note that these FHA loan limits are just 65 percent of conforming loan (Fannie Mae and Freddie Mac) loan limits. So if you need to spend more in a low-cost area, consider conventional (non-government) home loans.

FHA maximum loan amounts in high-cost areas

On the other hand, FHA is fairly generous in designated high-cost areas. In that case, the loan limits are as high as 150 percent of the national conforming loan limit. Many areas have maximum loan limits that fall between these highest levels and the floor. To find the limit for your county or metropolitan statistical area (MSA), check out HUD’s search page.

• One-unit: $726,525
• Two-unit: $930,300
• Three-unit: $1,124,475
• Four-unit: $1,397,400

Alaska, Hawaii, Guam and the US Virgin Islands

These areas have special higher limits than other places. The limits below are the maximum loan limits for those states and territories (however, not every area in these locales has the highest limit):

• One-unit: $1,089,787
• Two-unit: $1,395,450
• Three-unit: $1,686,700
• Four-unit: $2,096,100

Why higher FHA mortgage limits in 2019 is good

For many, FHA offers an opportunity for homeownership that would otherwise be unavailable. FHA home loans allow credit scores as low as 580 for a 96.5 percent loan, and as low as 500 for a 90 percent mortgage.

FHA mortgages are also flexible about down payments (they can be gifted, for example), and debt-to-income ratios (up to 50 percent is okay in some cases).

So, if you need the flexibility of FHA financing, but want to spend more on a house, these latest increases are good news.

Consider conventional financing

However, for stronger borrowers with great credit and / or substantial down payments, conforming (Freddie Mac or Fannie Mae) home loans are usually cheaper.

It pays to check with both programs, and to obtain quotes from competing mortgage lenders to get the best deal. That’s easy to do right here.