Source: Fox Business
In response to the escalating home prices seen last year, the Federal Housing Administration has raised its loan limits on FHA loans for 2021.
FHA loans are a type of mortgage loan backed by the Federal Housing Administration. These types of loans are particularly popular with first-time home buyers, because they allow down payments as low as 3.5%, and the qualification criteria are less strict when compared to other types of mortgage loans.
FHA loans are provided by traditional lenders, not the Federal Housing Administration. And since the FHA “guarantees” these loans, banks can lower their qualification criteria to potential borrowers who would otherwise be considered as “high risk” for more traditional loan products.
In high-cost areas, such as many coastal regions in California, the loan limit for a single-family home is $822,375, up from $765,600 last year. See the loan limits by county.