Increased FHA Loan Limits Help Homebuyers Buy a Higher Cost Home in 2022

Couple moving into a new home bought with a FHA loan

Homebuyers who would like to purchase a home with a lower down payment or credit score in 2022 can now finance a higher cost home. The Federal Housing Administration (FHA) has announced a 7.4% increase to the low-cost and high-cost area loan limits for FHA home loans financed in 2022 for 3,188 counties across the nation. In 45 counties, FHA’s loan limits will remain unchanged. 

As of 1 January 2022, the FHA low-cost loan limit will increase to $420,680 for one-unit properties. 

In high-cost areas, the 2022 FHA loan limit for one-unit properties will be $970,800. 

The FHA has adjusted loan limits for properties purchased in Alaska, Hawaii, Guam, and the U.S. Virgin Islands to account for higher construction costs, so properties in these areas have a ceiling of $1,456,200 for a one-unit property. 

Click here to see the 2021 FHA loan limits for your county. 

How does the FHA determine its home loan limit? 

FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008 (HERA), to set Single Family forward loan limits at 115% of area median house prices. FHA calculates forward mortgage limits for a Metropolitan Statistical Area based on the county within the MSA having the highest median price. 

The FHA sets its low-cost area mortgage limits at 65% of the national conforming loan limit, which is $647,200 for a one-unit property in 2022. 

The FHA national high-cost area mortgage limits are set at 150% of the national conforming limit, which is $970,800 for a one-unit property in 2022. 


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