FHA loan limits for 2027: what changed and what it means for buyers
FHA loan limits for 2027 have been updated to reflect rising home prices. This guide covers the new floor and ceiling amounts by county type, how they compare to conforming limits, and who benefits most from the FHA program in the current rate environment.
FHA loan limits reset each January based on conforming loan limit changes set by the FHFA. For 2027, limits rose for the eleventh consecutive year as home prices remain elevated across most US markets. Here is what changed, what the new numbers mean in practice, and whether an FHA loan still makes sense at current rates.
2027 FHA limits: floor, ceiling, and special markets
These figures apply to single-family (1-unit) properties. Multi-unit limits are higher — a 4-unit property in a standard county has an FHA limit of $1,007,175. The HUD county lookup tool gives exact limits for any zip code.
How the limit increase was calculated
The FHFA raised the 2027 baseline conforming loan limit to $806,500 (a 3.4% increase over 2026). FHA's floor is 65% of that: $524,225. The ceiling is 150%: $1,209,750. Counties where 115% of the local median home price falls between those two values get a county-specific limit set to that 115% figure. All calculations use the October–October median sales price series from HUD's own data, sourced from FHFA's annual survey.
FHA vs conventional: who benefits more at 2027 limits?
| Factor | FHA | Conventional |
|---|---|---|
| Min. down payment | 3.5% (580+ score) | 3% (HomeReady/HomePossible) |
| Min. credit score (guideline) | 580 for 3.5%; 500 for 10% | 620 (most lenders) |
| Mortgage insurance | MIP: 1.75% upfront + 0.55%/yr | PMI: 0.2%–2% (credit-based) |
| MI cancellation | Never (for <10% down loans post-2013) | At 80% LTV |
| DTI maximum | 57% (with compensating factors) | 50% (Fannie/Freddie) |
| Loan limit (standard county) | $524,225 | $806,500 |
| Property condition | Stricter — must meet HUD minimum property standards | More flexible |
MIP cost in dollars: what buyers actually pay
The real cost comparison often comes down to MIP vs PMI. On a $400,000 purchase with 3.5% down:
- Upfront MIP: $400,000 × 96.5% × 1.75% = $6,755 (rolled into loan, so balance becomes $392,780)
- Annual MIP: $392,780 × 0.55% = $2,160/year ($180/month)
- Never cancels for the life of the loan (unless you refinance to conventional at 80%+ LTV)
A borrower with a 700 credit score may get conventional PMI at 0.6% — about $110/month on the same loan — that cancels when the balance hits 80% of the original purchase price. The CFPB's FHA explainer covers the full MIP structure and when an FHA-to-conventional refinance makes financial sense.
External references
- HUD — FHA mortgage limits by county (2027)
- FHFA — Conforming loan limit announcement
- HUD — FHA loan overview and eligibility
- CFPB — What is an FHA loan?
- Fannie Mae — Housing insights research
- Investopedia — FHA loan guide
Common questions
What is the FHA loan limit for 2027?
FHA loan limits are set annually by HUD and vary by county based on local median home prices. For 2027, the national floor (standard-cost areas) is $524,225 for a single-family home, and the national ceiling (high-cost areas like San Francisco and New York) is $1,209,750. Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a special limit of $1,814,625. The HUD mortgage limits search tool lets you look up the exact limit for any county.
How is the FHA loan limit calculated each year?
FHA limits are tied to the conforming loan limits set by the Federal Housing Finance Agency (FHFA). The FHA floor is 65% of the FHFA conforming limit; the ceiling is 150%. When FHFA raises conforming limits — as it has every year since 2017 — FHA limits rise proportionally. The FHFA conforming loan limit page publishes the baseline from which FHA limits are derived.
What credit score do you need for an FHA loan?
FHA requires a minimum 580 credit score to qualify for the standard 3.5% down payment. Borrowers with scores between 500–579 can still qualify but must put down at least 10%. Lenders often impose "overlays" — stricter internal minimums, commonly 620–640 — so approval depends on both the FHA minimum and your specific lender's policy. The HUD FHA loan overview explains all eligibility requirements including the mortgage insurance premium structure.
What is MIP and does it go away on an FHA loan?
MIP (Mortgage Insurance Premium) is the FHA equivalent of PMI. It comes in two parts: an upfront MIP of 1.75% of the loan (typically rolled into the loan balance) and an annual MIP of 0.55% for most 30-year loans with <10% down. Unlike conventional PMI, FHA annual MIP on loans originated after June 2013 with less than 10% down is permanent — it does not cancel at 80% LTV. The CFPB's FHA guide explains both MIP components and how to factor them into your true monthly cost.
How do FHA and conventional loans compare at the same purchase price?
FHA loans often produce lower monthly payments for borrowers with lower credit scores because MIP rates are not credit-score-based (unlike conventional PMI). But for borrowers with 620+ scores, conventional loans can be cheaper in the long run because PMI cancels at 80% LTV — FHA MIP doesn't. At a 3.5% FHA down payment vs 5% conventional, the FHA borrower also carries a larger balance. Fannie Mae's housing insights research compares total cost of ownership across loan types at various credit score tiers.
Can you use an FHA loan for a multi-family property?
Yes. FHA insures loans on 2–4 unit properties, provided you occupy one unit as your primary residence. The 2027 limits for 2–4 unit properties are higher: a 2-unit goes up to $671,200 in standard areas and $1,548,975 in high-cost areas. This makes FHA "house hacking" viable in markets where a 4-unit could generate significant rental income. The HUD limits page has the full table for 1–4 unit properties by county.
Calculate your FHA payment on the US mortgage calculator — or check what you can afford with the affordability calculator.