The FHA has increased the loan limits for every category in 2021, a boon to prospective homebuyers who may have been negatively impacted by the recession that came with the COVID-19 pandemic. The two primary categories of loan limits are low-cost area and high-cost area, and each category has separate limits for SFRs, duplexes, triplexes, and quadplexes.
For low-cost areas, your loan limits have gone up approximately between $25,000 and $47,000. The SFR limit went from $331,760 in 2020 to $356,362 in 2021. The duplex limit went from $424,800 to $456,275, triplex $513,450 to $551,500, and quadplex $638,100 to $685,400. High-cost areas saw an increase between about $57,000 and $110,000. For SFRs, it went from $765,600 to $822,375, duplexes from $980,325 to $1,053,000, triplexes $1,184,925 to $1,272,750, and quadplexes $1,472,550 to $1,581,750.
In order to qualify for any FHA loan, the requirements you’ll need to meet include credit score, down payment amount, and debt-to-income ratio. The credit score minimum is 500. If your credit score is below 580, you need a minimum down payment of 10% of the purchase price, otherwise the minimum down payment is 3.5% of purchase price. The maximum debt-to-income ratio for all debt is 43%, and 31% front-end. In addition, you must have an FHA appraisal and home inspection, cannot purchase and resell the home within 90 days, and must use the loan for a primary residence.
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