FHA: Income Limitations & Qualifications

Federal Housing Administration (FHA) loans are loans sponsored and partly backed by the U.S. Department of Housing and Urban Development (HUD) to help low and moderate income earners finance a home. There are a variety of programs the HUD offers to help qualifying borrowers. If FHA’s loan options sound like a good fit for you, you may be wondering what specific criteria you have to meet to qualify. Here’s a summary of FHA loans’ limits and requirements to help you assess what’s available to you:

Basic FHA Loan Qualifications:

  • Minimum credit score of 580
  • No exact minimum income limit, but the FHA looks into your income to assess your ability to afford a mortgage
    • In addition to monthly mortgage payments, you’ll have to plan for these costs:
      • Down payment (as low as 3.5%)
      • FHA mortgage insurance premiums (MIPs)
  • Must be used on a primary residence

FHA Loan Income Limitations

Although they vary by state and county, there are general loan limits that the FHA details. Updated in May of 2017, FHA loan limits are set based on loan limits produced by the Federal Housing Finance Agency (FHFA). These recent limits set a minimum borrowing amount of $275,665 and a borrowing cap of $636,150. However, these may not be reflective of the limits in your state. Although variation is not dramatic from state to state and county to county, these differences play a role in your FHA loan offerings. Check online for more information on your state’s loan limits: California.

If you fit these criteria and if the loan limits suit your needs, congratulations! You’re now well on your way to financing your home.