The first step in buying a new home is to get your finances in order. Many first time homebuyers turn to FHA financing because the down payment is only 3.5% of the loan amount and it is available to borrowers with lower credit scores. The FHA loan limits were announced on December 3, 2019 for the following year.
FHA Loan Limits for 2020 Nationally
On December 3, 2019, the Department of Housing and Urban Development (HUD) announced that they were increasing FHA loan limits for most U.S. counties in 2020. Loan limits on a national basis are now $331,760, up from the current limit of $314,287. The good news is that in expensive areas like the Washington DC metro area the loan limits are $765,600.
What this means is that for someone looking to purchase a home in the DC metro area with the 3.5% minimum down payment, using an FHA loan, can now do so, up to a $765,600 purchase price.
This is the fourth year in a row that FHA loan limits have increased and continues to show the strengthening and stability of the housing market. The limits also continue to move in lock step with Conventional loan limits as well, which moved up to a loan limit of $510,400 (FHA loan limits are almost always 65% of that limit).
FHA Loan Limits for the DC Metro Area
Limits are based on an area’s median home price, so the DC metro area, along with about 70 “high-cost” counties, gets limits of $765,500. With high building costs, Alaska, Hawaii, Guam, and the U.S. Virgin Islands get a $1,148,400 limit.