Loan Limits on Types of Loans

There is a maximum limit on how much money you can borrow depending on the type of loan and where you intend to purchase your home. Loan limits are revised every year and the limits vary with the type of loan and the geographic area. We will start with Conventional loans. Basically, a conventional loan can be divided into two categories:

(1) Conforming Loans (Loans that conform with the underwriting guidelines of Fannie Mae and Freddie Mac)

(2) Non Conforming Loans do not meet the underwriting requirements set by Freddie Mac and Fannie Mae, higher limits are set by lenders for bigger loan amounts and these loans are commonly known as Jumbo Loans. Since Jumbo Loans are non-conforming loans, loan limits and underwriting criteria lays with the individual lender. 

Conventional Conforming Loan Limit:

The maximum loan limits for conforming conventional loans are set by the Federal Housing Finance Agency (FHFA) annually and its based upon the geographic area and the number of units. 

In 2022, Conforming Conventional Loan limit for most of the areas in the United States is 647,200. For High cost areas including Alaska, Guam, Hawaii and US Virgin Islands is 970,800.

FHFA's website provides a handy tool to look up the maximum loan limits, number of units based upon geographic area for Conforming loans..

FHA Loan Limit:

The maximum Loan limit for an FHA loan is set by the Federal Housing Administration (FHA) annually based upon the geographic area and the number of units. 

For 2022, the FHA loan limit for most of the areas in the United States for a single family home is 450,800 with a maximum of 970,800 in a high cost area. 

HUD's website provides a handy tool to look up the maximum FHA loan limits based upon the number of units and geographic area where you intend to purchase a home. 

VA Loan Limit:

Technically, there is no maximum loan limit on a VA loan. The term loan limit in reference to VA Certificate of Eligibility (COE) refers to the amount the VA would guarantee on the loan. The Blue Water Navy Vietnam Veterans Act of 2019  removed loan limits for eligible veterans and service members. As of January 1st, 2020, VA Loans have no maximum limits for a loan over 144000 with full entitlement.  The VA would pay 25% of the loan amount in case of a default on the loan. The prospective VA loan borrower must fulfill lender and selected program requirements and must fulfill all the underwriting guidelines of the selected program and the lender. 

USDA Loan Limit:

USDA Loan limits are revised  periodically. The maximum loan limits vary by the geographic location. For 2022, the limits on USDA loans for the majority of United States is 336500 and a maximum of 970800 in high cost areas. 

USDA's website provides a handy tool for loan eligibility and a preliminary check for prospective USDA program borrowers. 

In addition to the above options, we also offer Jumbo loans with much higher limits. If you have your eyes on a home that is priced above the maximum limits stated above, we also offer Jumbo Loans. Contact us today. 

Related Topics:               What are Conforming and Non Conforming Loans                 What is the Definition of “non-conforming” loan? Give  Examples of “non-traditional loans”.                What are Conventional/conforming (e.g., Fannie Mae, Freddie Mac) loans?              What is the Conventional/nonconforming (e.g., Jumbo, Alt-A) loan? Explain  Facts on “jumbo loans”                          What are Jumbo Loans?            Conventional Loans           FHA Loans             VA Loans             USDA Loans          An Adjustable Rate Mortgage             A Fixed Rate Mortgage            Construction Loans             Graduated Payment Loans                

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