USDA area loan limits are based on the median home prices in a particular county or metropolitan statistical area (MSA). The USDA uses data from the Federal Housing Finance Agency (FHFA) to determine these median home prices. The FHFA calculates the median home price for each county and MSA based on the sales price of homes sold during the previous calendar year.

• Once the median home price is determined for a particular area, the USDA sets the loan limit at 115% of that amount. This means that borrowers can borrow up to 115% of the median home price in their area, up to a maximum loan amount of $548,250. However, there are some areas, such as Alaska, Hawaii, and certain counties in California, where the loan limit is higher due to higher median home prices.
• USDA area loan limits are important because they determine the maximum loan amount that borrowers can qualify for. If a borrower is looking to purchase a home that exceeds the loan limit for their area, they may need to consider other loan options or adjust their home search to find a more affordable property.
• The USDA area loan limits vary by county and are determined based on the average income of the area. The USDA classifies areas as either “low-income” or “moderate-income,” and the loan limits differ between the two. Low-income areas have higher loan limits, while moderate-income areas have lower limits. The loan limits are adjusted annually based on changes in the area’s income data and inflation.

It is always best to be acquainted with the Area Loan Limits of the region in which you are interested in purchasing your new home.