Understanding your loan limit is the first step in finding the mortgage loan that’s right for you. Use this Loan Limit Calculator to see how much you will be able to borrow for your home. The Calculator factors in the type of mortgage you are seeking, the type of house or property you want to purchase and your city and state to determine your loan limit. The good news is that the loan limits have recently increased for all three types of loans: conventional, FHA and VA Loans.
The loan limit is the maximum amount of a mortgage you can get in the area where you live based on the type of property that you want to buy – in other words, how much you can borrow within established county limits.
If you choose to buy a house or property that costs more than the loan limit for your county, your loan would be referred to as a “jumbo” loan. In most locations, a conventional mortgage (that is, a loan backed by Fannie Mae or Freddie Mac) of more than $424,100 is considered a jumbo loan.
Loan limits vary with the type of loan. For example, an FHA Loan has specific limits set by the Federal Housing Administration. A VA Loan has limits set by the Department of Veterans Affairs. These two types of loans have special conditions. If you choose a loan that is higher than an FHA loan limit, it cannot be insured. Similarly, loans exceeding VA loan limits in your county cannot be guaranteed by the federal government.
To use the Calculator and find out your loan limit, you will first need to select the type of loan that you need. There are three types of loans listed for you to select:
So, what’s the difference between these loans and which one is right for you? Here is a summary of each type of loan.
A conventional loan is a home loan (also known as a “conforming” loan) that is not insured or guaranteed by the federal government. This loan must follow the guidelines set forth by Fannie Mae and Freddie Mac.
A conventional loan may have either a Fixed Rate or an Adjustable Rate (ARM). A Fixed Rate is an interest rate that is set for the entire term of your mortgage, from 8 to 30 years. That means you always pay the same amount of interest and it does not change over the course of your loan. An Adjustable Rate is just like its name – it starts out low in the beginning and remains low for a set number of years, but is then followed by periodic adjustments.
Since the early 1970s, the national conventional Loan Limit for single-family properties has increased from $33,000 to $417,000 – and, most recently for 2017, the limit has increased to $424,100.
Not all areas of the country are equal. The loan limits are 50 percent higher ($636,150) in the following four areas, due to the higher housing costs:
In 2008, a series of legislative acts temporarily increased the loan limits for single-family properties in certain high-cost areas of the United States up to $729,750.
The FHA Loan program was created in the 1930s to help make home loans more affordable. If you have less-than-perfect credit or are planning to make a down payment less than 20%, you may qualify. The FHA Loan down payment is 3.5% of the purchase price. In addition, you can secure a lower interest rate.
If you have filed for bankruptcy or experienced a previous foreclosure, you can obtain an FHA Loan within 2 to 3 years, versus a wait time of 4 to 7 years for other conventional financing options.
There are several types of FHA loans based on the length of the mortgage and choice of fixed or adjustable (ARM) interest rate. The FHA offers the following:
Are you a Veteran or active service member? The VA Loan program was created in 1944 to help active-duty and returning service members and their families achieve the dream of homeownership.
The VA Loan is unique because it does not require a down payment as part of the mortgage process. This also is known as a “$0 down loan.” This is an exclusive benefit for Veterans generally not available to non-Veteran borrowers in the marketplace.
Generally, the following people are eligible for the VA Loan and the $0 down payment benefit:
The loan limits for the VA Loan state how money much a Veteran may borrow to buy a home without making a down payment. While there is no maximum limit on how much a Veteran can borrow to finance a home purchase, the basic entitlement available to eligible Veterans is $36,000. Generally, lenders will loan up to 100% of the home value without requiring a down payment, if the Veteran has full eligibility and the property appraises for the asking price.
In 2017, VA loan limits will be going up for the first time in 10 years. Qualified buyers in most parts of the country can now borrow up to $424,100 before needing a down payment. That limit had been $417,000 since 2006. In more expensive housing markets in the continental U.S. and a few Hawaii counties, the loan limit is even higher.
Are you planning to buy a single-family home or a multi-family residential unit? The Calculator will ask you to select the type of property.
A single-family unit (also called a “detached” home) is a free-standing residential building or house. Any type of property beyond the single-family unit is referred to as a “multidwelling unit” or MDU). This is where multiple separate housing units are contained within one building or several buildings within a single complex, such as an apartment building.
If you are planning to purchase a multidwelling unit, select one of the options on the Calculator:
For a conventional loan, Fannie-Mae guidelines apply to all residential properties up to 4 units. Properties with 5 or more units are typically financed with commercial loans.
To use this Loan Limit Calculator, select the type of loan you want, then the type of property. Select your state and city, then click “Calculate.”
The resulting number will be the loan limit in your area for the type of property you want to buy. This will let you know how much money you can borrow for your mortgage within the county limit, before your loan would be considered a jumbo loan.
To see if you are eligible for a conventional home loan, FHA Loan or VA Loan, or if you are just interested in learning more about the various loan options we offer at Forthright Funding, please feel free to contact one of our mortgage loan specialists at (855) 351-9522.
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