The FHA’s primary goal is to facilitate homeownership, particularly for low- to moderate-income borrowers.  As such, county limits exist to ensure that the Federal Housing Administration (FHA) loan programs remain accessible to a wide range of borrowers across different regions.

• County limits for FHA loans contribute to market stability by controlling the loan amounts insured by the FHA. By capping the loan size, it helps mitigate the risk of excessive lending and potential defaults. These limits align with the FHA’s goal of supporting responsible lending practices and reducing the likelihood of market disruptions.

• FHA loan programs are designed to offer more flexible lending standards compared to conventional loans. By establishing county limits, the FHA ensures that loans are available in both high-cost and lower-cost areas. This helps borrowers who may not qualify for larger conventional loans but still need affordable financing options to purchase a home.

• The FHA county limits help target assistance to areas with higher housing costs. In regions where the cost of housing is generally higher, the FHA loan limits are set at a higher level to accommodate the local market conditions. This allows borrowers in these areas to access FHA loans and benefit from the program’s features, such as low down payments and more lenient credit requirements.

• FHA county limits are not fixed and are typically adjusted annually based on changes in housing prices. These adjustments help ensure that the program remains relevant and responsive to market conditions, enabling more borrowers to participate in the FHA loan program and achieve homeownership.

• County loan limits provide a consistent framework for lenders and borrowers participating in the FHA program. By establishing maximum loan amounts for each county, it ensures uniformity and clarity in loan underwriting and processing. Lenders can rely on these limits to determine the eligibility of borrowers and the loan amounts that qualify for FHA insurance.

• FHA county loan limits contribute to overall market stability by preventing excessive borrowing and lending practices. They discourage the concentration of high-risk loans and help maintain balance in the mortgage market. Limiting loan amounts mitigates the risk of defaults and foreclosure, which can have broader impacts on the housing market and the economy.

• All FHA mortgage loans will be determined to be either a conforming or high balance loan. For
  homes which are located in what has been determined to be a high balance region, the FHA loan limits will vary depending upon the county.
• In regions where high balance limits don’t apply, anything over $472,030 will be considered a high balance loan, thus in a county which is considered to be a high cost region, a high balance mortgage will then be any loan size above the conforming limit.

FHA county loan limits contribute to overall market stability by preventing excessive borrowing and lending practices. They discourage the concentration of high-risk loans and help maintain balance in the mortgage market. Limiting loan amounts mitigates the risk of defaults and foreclosure, which can have broader impacts on the housing market and the economy.