2021 Mortgage Loan Limits: USDA, VA, FHA and Conventional Loans

Mortgage loan limits are on the rise in 2021, but it’s not the same limit across programs. In fact, USDA, VA, FHA, and Conventional loan programs each have their own limits. This is why it’s important for us to quickly review each maximum loan amount for each of these mortgage programs.

Plus, in order to help you stay organized, we’ve created a FREE Loan Comparison Chart for you to download. It compares each loan programs side-by-side and is contained in one simple chart… Download it now!

What is a Maximum Mortgage Loan Limit?

To begin, a mortgage loan limit is the maximum amount a home buyer can borrow under a specific mortgage program. Just remember, a loan limit applies to the loan amount and not the home’s sales price.

USDA

Believe it or not, there is actually not a loan limit for USDA loans. Wait a second, is this a trick? Nope, it’s true. Since there is no maximum sales price for a USDA loan, this means there is also NO maximum mortgage loan limit!

Instead, the USDA maximum loan amount is calculated based on the applicant’s ability to qualify. Thankfully, USDA income limits have increased as of May 4th, 2020. This recent USDA income limit increase results in making it easier for homebuyers who are trying to qualify for higher priced homes.

Thus, without a loan limit a USDA mortgage can be a powerful option!

VA

VA loan limits depend on whether or not you have used your full entitlement.

To have full entitlement you must never have used your VA home loan benefit or have paid a previous VA loan in full (including after a bankruptcy, foreclosure, or a short sale.) In these cases there is no maximum VA mortgage loan limit!

On the other hand, if you have used some of your entitlement, but have funds remaining, your VA home loan limit is now the same as the Federal Housing Finance Agency (FHFA). Meaning, they are based on the county loan limit where the property resides.

Calculating available VA entitlement and your maximum VA mortgage loan limit can be complicated, so if you have any questions just call or email so we can go to work for you!

Conventional Loans (Fannie Mae and Freddie Mac Conforming)

Conventional loan limits are established by the FHFA (Federal Housing Finance Agency) and ultimately can vary based on you county. That being said, home prices rose an average of 7.42% across the nation, and in turn the lending limits for conventional loans have also increased.

Previously, the 2020 general loan limit was $510,400. Now in 2021, the baseline conventional loan limit has increased to $548,250 for a 1-unit property.

However, this number has increase even more for those areas which are considered “high-cost”.

For more information go to the Federal Housing Finance Agency’s (FHFA) announcement.

FHA

Due to an increase in housing prices the FHA announced on December 2nd, 2020 that it would increase it’s loan limit in 2021 for 3,108 counties and remain unchanged in 125 counties.

Overall, the maximum FHA standard mortgage loan limit for a one-unit property has increased from $331,760 in 2020 to $356,362 in 2021! Additionally, the respective loan amounts have also increased for 2,3, and 4 unit properties that are eligible for FHA financing. They are listed here:

• 1-unit property: $356,362
• 2-unit property: $456,275
• 3-unit property: $551,500
• 4-unit property: $685,400

As a reminder high cost area limits allow for even higher maximum FHA mortgage loan limits.

For a complete list of FHA loan limits visit the FHA’s loan limits page, here.

We Are Always Here for You

As you can see, mortgage loan limits vary across loan programs. However, there’s no need to be overwhelmed.  Let our experience be your resource!

Whether it be USDA, VA, FHA, or Conventional, simply call or email to discuss your scenario and let us show you the “Metroplex” difference!

(800)806-9836 Ext. 280

SeanS@MPLX.org