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What Are FHA Loan Limits?

If you've been thinking that you will look into an FHA loan in order to help you to purchase a home of your own, you're going to want to be sure that you have done your research. With an FHA loan, what you will find is that, if you are a first time home buyer and you have concerns about your credit, it's still possible to receive a mortgage that bears a great interest rate – in other words, even with less than perfect credit, you'll find that an FHA loan enables you to qualify for a competitive mortgage.

Of course, when you are looking into FHA loans and you start reading about the different benefits of FHA loans, you're going to come across a great deal of information that tells you about the loans and you're going to read comments about FHA loan limits. In some cases, the concept of FHA loan limits may seem daunting – as if you may not be able to borrow as much to put toward a home as you might like; that's why it is important to do a bit more research.

What you are going to find when you look into FHA loans and FHA loan limits is that the type of property that you are planning to purchase will have an impact on the FHA loan limits. Someone who is using an FHA loan to purchase a single family home will have a lower amount that they can borrow than those who are looking into buying a two family, a three family or even a four family property.

In addition, the more that you start looking into FHA loans and FHA loan limits, you are going to find that the area in which you plan to purchase a home has an impact on the amount of money that you are eligible to borrow. For example, someone who is planning to purchase a home in Dallas, TX with an FHA loan will discover that the FHA loan limits are $271,050 for a single family property; the FHA loan limit on a single family home in San Francisco, CA or the state of Virginia near Washington, DC are considerably higher, $729,750.

FHA loan limits are set into place so that those who want to be able to purchase a home of their own will be able to apply for a mortgage that carries a lower interest rate for the life of the loan – an interest rate that is far more affordable than some home buyers would be able to get simply by going into their local bank. The reason that FHA loans are more affordable is that the Federal Housing Administration (a branch of the Department of Housing and Urban Development), insures the loan.

FHA loan limits are in place so that home buyers with less than perfect credit or who are purchasing for the first time don't get in over their heads – but that doesn't mean that the areas in which people want to buy are going to find that those limits are one size fits all.

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