Jumbo loans and FHA and conforming loan limits

If you are buying in an expensive area, or the home has several units, the size of your loan can decide which kind of loan you get. This guide explains what conforming and FHA loan limits are, how they are set county by county, what a jumbo loan is and how to find your area’s limit on our data pages.

Conforming limit in most counties, one-unit home

$832,750⁷

Highest conforming limit in the country, one-unit home

$1,299,500¹

Lowest FHA limit in the country, one-unit home

$541,287⁵

Highest FHA limit in the country, one-unit home

$1,299,500⁵

What a loan limit is

A loan limit is the largest amount a loan can be and still follow a program’s rules. Two of them matter most when you buy:

• The conforming limit. According to FHFA, Fannie Mae and Freddie Mac are restricted by law from buying mortgages with an origination balance above a certain amount, called the conforming loan limitconforming loan limitThe conforming loan limit is the maximum mortgage amount Fannie Mae and Freddie Mac may buy from lenders. Those two companies back most conventional loans, so a loan within the limit ("conforming") usually gets better terms than a larger one ("jumbo"). The Federal Housing Finance Agency (FHFA) sets it every year using the formula in the HERA law, and high-cost areas have a higher limit. Each county's FHA loan limit is computed from this number.See the full definitionClose. Loans above that limit are called jumbo loansjumbo loanA jumbo loan is a mortgage whose amount is above the conforming loan limit. That limit is the most that Fannie Mae and Freddie Mac (the two companies that buy mortgages from lenders) are allowed by law to purchase. It is set every year with their regulator, the Federal Housing Finance Agency (FHFA), and it is higher in high-cost counties. A loan may go over the limit, but then it is called a jumbo loan. The CFPB notes that a jumbo loan may cost more to get than a conforming loan, and it must meet special requirements to count as a Qualified Mortgage (QM).See the full definitionClose.¹
• The FHA limit. An FHA loanFHA loanAn FHA loan is a mortgage made by a private lender and insured by the Federal Housing Administration (FHA), an agency of the U.S. government. That insurance protects the lender if you stop paying, which is why the lender can accept a lower down payment and a less-than-perfect credit history than on a conventional loan. Federal law sets the minimum cash investment at 3.5% of the property's value and caps the loan amount at the FHA limit, which changes by county. In exchange for the insurance you pay a mortgage insurance premium.See the full definitionClose cannot exceed the FHA limitFHA loan limitThe FHA loan limit is the maximum mortgage amount the Federal Housing Administration can insure in a county or metropolitan area. The law computes it from the area's median home price: in general it is 115% of that price, but never less than a national floor (65% of the conforming loan limit) nor more than a national ceiling (150% of that limit). That is why expensive counties have higher limits. There is a separate limit for one-, two-, three- and four-unit homes. HUD publishes the limits every year and we show them for every county.See the full definitionClose for its area. According to HUD Handbook 4000.1, under most programs the maximum loan is the lesser of the area’s limit or a percentage of the home’s value.⁵

Both are set by county. The CFPB puts it plainly: FHA loans have a maximum loan amount that varies by county,⁶ and conforming loans have one limit in most counties and a higher one in high-cost counties.⁷

Notice one thing: the limit applies to the loan amount, not the home price. Fannie Mae applies its limits to the original loan amount.³ If your loan is over the limit, a larger down paymentdown paymentThe down payment is the part of the home's price you pay out of your own pocket when you buy; the loan covers the rest. In U.S. Spanish it is also called enganche, cuota inicial or entrada. Each loan type has its own minimum: FHA requires at least 3.5% of the value, VA and USDA loans may require none, and conventional loans ask for more if you want to avoid private mortgage insurance. A larger down payment lowers the loan, the monthly payment and the total interest; many state programs help families put it together.See the full definitionClose brings it down.

The conforming limit: how it is set

Federal law ties the conforming limit to home prices. It is adjusted on January 1 each year by the change in FHFA’s house price index; if the index falls, there is no adjustment that year and declines are accumulated.² Today it is set under the permanent formula created by the HERA law of 2008.¹

In expensive areas the limit goes up. When 115% of an area’s medianmedian (typical value)The median is the value in the middle when you sort all the data from smallest to largest: half of the cases fall below it and half above. If the number of data points is even, it is the average of the two middle values. On aquitucasa, when we say "typical value", "typical rent" or "typical income" we mean the median published by the Census Bureau, not the average: the average is pulled up by a few very expensive homes or very high salaries, while the median better describes what an ordinary family experiences. Every figure carries its source and date.See the full definitionClose home price exceeds the limit, the limit rises to the lesser of 150% of the limit or 115% of the median price. The law also allows limits up to 50% higher in Alaska, Guam, Hawaii and the Virgin Islands.²

Fannie Mae calls the limits that apply to most of its loans “baseline” (or general) limits, and the limits its regulator sets for certain areas “high-cost area” limits; high-balance loans are subject to the latter. Limits vary with the number of units in the property and its location.³ The law sets higher limits for 2-, 3- and 4-family homes than for a single-family home.²

In our data, the conforming limit for a one-unit home is $832,750 in most counties and reaches $1,299,500 at the highest. The conforming loan limits page shows each county’s limit.

The FHA limit: one number per county

FHA’s law (12 U.S.C. §1709) sets the limit for a single-family home at the lesser of 115% of the area’s median home price or 150% of the Freddie Mac limit. It has a floor: it cannot be lower than 65% of that limit. The “area” is a metropolitan area, and its median price is that of the county in the area with the highest median.⁴

HUD calculates the limits from those median prices, sets them by metropolitan area and county, and publishes new limits for each calendar year. All of them fall between the low-cost and the high-cost area limits.⁵ In our data, the FHA limit for a one-unit home ranges from $541,287 to $1,299,500.

FHA limits by state (one-unit home)

State	FHA limit (1 unit)
Alabama	$541,287
Alaska	$541,287 – $596,850
Arizona	$541,287 – $609,500
Arkansas	$541,287
California	$541,287 – $1,249,125
Colorado	$541,287 – $1,249,125
Connecticut	$541,287 – $977,500
Delaware	$541,287 – $630,200
District of Columbia	$1,249,125
Florida	$541,287 – $990,150
Georgia	$541,287 – $718,750
Hawaii	$586,500 – $1,299,500
Idaho	$541,287 – $1,249,125
Illinois	$541,287
Indiana	$541,287
Iowa	$541,287
Kansas	$541,287
Kentucky	$541,287
Louisiana	$541,287
Maine	$541,287 – $615,250
Maryland	$541,287 – $1,249,125
Massachusetts	$541,287 – $1,249,125
Michigan	$541,287
Minnesota	$541,287 – $552,000
Mississippi	$541,287
Missouri	$541,287
Montana	$541,287 – $754,400
Nebraska	$541,287 – $603,750
Nevada	$541,287 – $736,000
New Hampshire	$541,287 – $962,550
New Jersey	$541,287 – $1,249,125
New Mexico	$541,287 – $692,300
New York	$541,287 – $1,249,125
North Carolina	$541,287 – $805,000
North Dakota	$541,287
Ohio	$541,287 – $591,100
Oklahoma	$541,287
Oregon	$541,287 – $762,450
Pennsylvania	$541,287 – $630,200
Puerto Rico	$541,287 – $690,000
Rhode Island	$787,750
South Carolina	$541,287 – $690,000
South Dakota	$541,287 – $541,650
Tennessee	$541,287 – $1,029,250
Texas	$541,287 – $813,050
Utah	$541,287 – $1,163,800
Vermont	$541,287 – $575,000
Virginia	$541,287 – $1,249,125
Washington	$541,287 – $1,063,750
West Virginia	$541,287 – $1,249,125
Wisconsin	$541,287 – $552,000
Wyoming	$541,287 – $1,249,125

Each state shows its lowest and highest limit among its counties. Your county's limit is on your state's page. Source: HUD

The formula has a practical consequence. Where homes are cheaper, the FHA limit can sit at the legal floor, which is 65% of the Freddie Mac limit, and so be lower than the conforming limit. In expensive areas, by contrast, both can rise up to 150% of the limit.⁴² So in your county, an FHA loan and a conforming loan can have different caps: check both before you choose.

One detail that matters: with FHA, the upfront mortgage insurance premium (upfront MIPFHA mortgage insurance premium (MIP)The FHA mortgage insurance premium (MIP) is what you pay for the insurance the FHA requires on all of its loans. That insurance protects the lender, not you, if you fall behind. It has two parts: an upfront premium (upfront MIP or UFMIP), paid with your closing costs or added to the loan, and an annual premium collected in your monthly payment. Federal law authorizes HUD to charge both and caps them. According to the CFPB, it costs the same no matter your credit score. If you add the upfront premium to the loan, the loan amount and the total cost go up.See the full definitionClose, or UFMIP) is not counted when your loan is compared with the limit.⁵ Look up your county’s limit on the FHA loan limits page or on your county’s page, starting from places.

What a jumbo loan is

First, a note on names. According to the CFPB, a conventional loanconventional loanA conventional loan is any mortgage that is not insured or guaranteed by the federal government: it is not FHA, VA or USDA. The lender, or the companies that buy the loans (Fannie Mae and Freddie Mac), carry the risk. When the amount is within the conforming loan limit the loan is called "conforming"; above it, it is a "jumbo" loan. It usually asks for a higher credit score than an FHA loan and, if your down payment is less than 20% of the price, you are normally required to buy private mortgage insurance (PMI) until you build enough equity in the home.See the full definitionClose simply means one that is not part of a government program, and there are two main groups: conforming loans, which follow Fannie Mae’s and Freddie Mac’s rules and limits, and non-conforming loans.⁷ A jumbo loan is one above the conforming limit.¹ The CFPB separates two cases:

• Conforming jumbo (high-balance). A conforming loan above the general limit, available only in certain high-cost counties; its maximum varies by county.⁷
• Jumbo (non-conforming). A loan above your county’s limit. Rules vary by lender, but you usually need good credit and a high down payment.⁷

Non-conforming loans are less standardized: their eligibility, pricing and features can vary widely by lender. That is why the CFPB says it is especially important to compare several offers, to ask whether you could qualify for a conforming or FHA loan instead, and not to decide before you have your official Loan Estimates.⁷

A jumbo loan can be a qualified mortgagequalified mortgage (QM)A qualified mortgage (QM) is, according to the CFPB, a loan with less risky features and protections that make it more likely you can afford it. Under the ability-to-repay rule, the lender must make a good-faith effort to determine whether you can repay; if the loan is a QM, the lender is presumed to have followed that rule. In general, a QM cannot have an interest-only period, negative amortization or, with some exceptions, a balloon payment; it cannot exceed the rule's maximum term; it has limits on upfront points and fees; and the lender must verify your income and debts. FHA, VA and USDA loans are qualified loans.See the full definitionClose, but it has to meet special requirements; government loans such as FHA and VA always are.⁸ The non-QM loans guide explains what changes when a loan is not one.

Three sizes of conventional loan

Up to the baseline limit

Conforming

• Up to $832,750 in most counties, one-unit home.⁷
• Its rules are set by Fannie Mae or Freddie Mac.⁷

Only in expensive areas

Conforming high-balance

• Above the baseline limit, up to the county limit.⁷
• Available only in certain high-cost counties.⁷

Above the county limit

Jumbo

• Rules vary by lender.⁷
• You usually need good credit and a high down payment.⁷

If your loan is close to the limit, compare all three options and an FHA loan too.⁷

If you are a veteran: VA loans

VA loansVA loanA VA loan is a mortgage program offered by the U.S. Department of Veterans Affairs (VA) to help servicemembers, veterans and some surviving spouses buy a home. The VA does not lend the money: it guarantees part of a loan made by a private lender, and with that guarantee the lender can offer terms other loans do not have, such as buying with no down payment. Only people who meet the VA's service requirements can use it; the lender will ask for your certificate of eligibility.See the full definitionClose work differently. According to VA, if you have full entitlement you do not have a loan limit, as long as you can afford the loan and the appraisalhome appraisalAn appraisal is a written document that gives a professional appraiser's opinion of how much a property is worth. The lender orders it before approving the mortgage, because the home is the loan's collateral and the lender does not want to lend more than it is worth. If the appraisal comes in below the price you agreed, the bank bases the loan on the lower value and you will have to cover the difference, renegotiate the price or walk away if your contract allows it. An appraisal is not an inspection: it measures value, not the home's condition.See the full definitionClose supports the price; the lender still has to approve you. The maximum VA loan on a property is the appraised value or the price, whichever is lower.⁹

If you have already used part of your entitlement, what remains is based on the county limit, which for VA is the same as FHFA’s limit.⁹ Your Certificate of EligibilityVA Certificate of Eligibility (COE)The Certificate of Eligibility (COE) is the VA document that confirms to your lender that you can use the VA home loan benefit. According to the VA, requesting it is the first step toward a VA-backed loan. You can request it online, through your lender, which can process it in a VA system, or by mail with VA Form 26-1880. The documents you need depend on your situation: a Veteran uses discharge papers (DD214); an active-duty service member, a statement of service; and a surviving spouse, other forms. The COE does not approve the loan: the lender also reviews your credit, income and the appraisal.See the full definitionClose (COE) shows how much you have used. The VA home loan guide covers the rest.

How to tell whether your loan fits under the limit

Step by step, with your county

1. 1. Look up your county's limit

   Before you house hunt

   FHA limits are set by metropolitan area and county, and they change every year.⁵

2. 2. Check the number of units

   Before you house hunt

   Limits vary with the number of units in the property.³

3. 3. Work out the loan amount, not the price

   When you make an offer

   The limit applies to the loan; with FHA, the upfront premium does not count toward the limit.⁵

   Try it with your numbersHow much house can I afford?

4. 4. If you are over the limit, compare options

   Before you decide

   Ask whether you qualify for a conforming or FHA loan and get several offers.⁷

   Try it with your numbersCompare loans

5. 5. Get your Loan Estimates

   Before you decide

   The CFPB recommends not deciding before you have them.⁷

Example with real numbers

The loan on a typical home and the limits

With the typical US home value and an FHA loan with the minimum 3.5% down payment.

Price of a typical US home

$332,700

FHA loan, without the upfront premium (what is compared with the limit)

$321,056

Lowest FHA limit in the country (one unit)

$541,287

Conforming limit in most counties (one unit)

$832,750

This is an example with national numbers.⁵⁷ Compare your own loan with your county's limit.

Run it with your numbersMortgage calculator

If this is you

You are a veteran or service member

With full VA entitlement you have no loan limit, though the lender still has to approve you.⁹

You are buying a two- to four-unit home

The law sets higher limits for 2-, 3- and 4-family homes: check your county's limit for the number of units.²³

You are buying for the first time in an expensive area

Compare an FHA loan, a conforming loan and a jumbo loan before deciding.⁷ A HUD-approved housing counselor can help.¹⁰

Costly mistakes

• Mistake: Comparing the home price with the limit.

  Instead: The limit applies to the loan amount; with FHA, without counting the upfront premium.³⁵

• Mistake: Using another year's or another county's limit.

  Instead: Limits change every year and by county: check your county's limit for this year.²⁵

• Mistake: Forgetting that the home has more than one unit.

  Instead: Limits vary with the number of units.³

• Mistake: Taking the first jumbo offer.

  Instead: Rules and pricing vary widely by lender: compare several offers.⁷

• Mistake: Assuming a VA loan has the same limit as an FHA loan.

  Instead: With full VA entitlement you have no loan limit.⁹

What to do this week

1. Look up your county’s FHA limit and conforming limit on our FHA loan limits and conforming loan limits pages.⁵³
2. Confirm the number of units in the home you want to buy.³
3. Work out your loan amount with the mortgage calculator and compare it with the limit.⁵
4. If you are over the limit, get offers from several lenders, including an FHA or conforming one if you qualify.⁷
5. If you are a veteran, get your Certificate of Eligibility to see how much entitlement you have left.⁹
6. If you want help comparing, a HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose gives independent advice, often for free or at low cost.¹⁰