The Federal Housing Administration and Congress agreed to raise California FHA loan limits for 2024. This is great news for prospects looking to buy a house and homeowners seeking the opportunity to refinance their mortgage into a loan at a reduced interest rate.
Ever since the decline of the housing market in the early 2000s, the use of FHA home mortgages have increased and today these loans remain among the most popular in the nation.
There are plenty of reasons for that, but it really comes down to the fact that for first time home buyers and for those with low credit scores, FHA financing is one the easiest to qualify for and offer some of the best terms available.
FHA Loan Limit in California for 2024
Let’s review the update 2024 FHA Loan Amounts for California. For instance, areas such as San Francisco, Los Angeles, Oakland, Berkeley, Santa Cruz, Long Beach, Anaheim, San Jose, Santa Clara, Watsonville, and Sunnyvale boast the highest FHA loan limits in California. These limits are $1,149,825 for single-family homes, $1,472,250 for two-family homes, $1,779,525 for three-family homes, and $2,211,600 for four-family homes.
How Much Can I Borrow with FHA in California?
However, there has been some concern in recent years as to the loan limits associated with them. For the 2024 year, experts agree that the fact that California FHA loan limits aren’t going to change isn’t a bad thing.
And since only one other thing is changing regarding FHA loans, they’ll still be easier to qualify for and will be an excellent choice for anyone who is struggling to secure a more traditional loan, either because of a lack of a large down payment or because of a less than perfect FICO score.
In California, cities such as San Francisco, Los Angeles, Oakland, Berkeley, Santa Cruz, Long Beach, Anaheim, San Jose, Santa Clara, Watsonville, and Sunnyvale boast the highest FHA loan limits. The maximum loan amounts peak at $1,149,825 for single-family homes, $1,472,250 for two-family homes, $1,779,525 for three-family homes, and $2,211,600 for four-family properties.
California offers a plethora of homebuyer assistance programs, each with its own set of eligibility criteria. It falls on the borrower to conduct research on these programs and coordinate with them directly, separate from their lender.
California FHA Mortgage Limits
California loan limits vary depending on exactly where you live. In densely populated metro areas where costs are very high, loan limits will finally get a boost.
For those looking for a home in rural areas or those where housing costs are lower, the loan limit will also remain the same for 2024, at $271,050.
As mentioned above, there is one thing that will be changing regarding all FHA insured loans.
Specifically, for 2024 the annual insurance premiums associated with FHA loans is going to drop from 1.35 down to .85.
When this is combined with today’s much lower interest rates of less than 4 percent in most cases, it means that new FHA loans will offer some very substantial cost savings.
And those who are looking to refinance through FHA programs will also be able to find reduced prices thanks to these new changes.
Luckily, the homes on the market today are still hovering at right around the same prices they were in most of 2023 as well. This means that those who are shopping for a home will still have little trouble finding one that falls within the limits of an FHA loan, making it easier to secure the loan that you need to get into the home of your dreams.
So, all in all, while the FHA loan limits aren’t changing for 2024, it’s likely that this won’t really have an impact on those seeking out loans. If anything, the lowered premiums will only help those seeking a loan since it will make it more affordable to get and maintain a loan throughout time.
You’ll still need to meet the qualification requirements of an FHA loan. This usually means having a credit score of at least 600 and a down payment of around 3.5%, though credit scores could actually be slightly lower with the right down payment. If you have lower scores, consider a FHA loan for poor credit, but you may need more than 3.5% down to off-set the risk to the lender. These loans are still among the best choices for anyone looking to secure a loan and move into their dream home.
FHA mortgage lending limits in California fluctuate depending on various housing types and local housing costs. These FHA loans are tailored for borrowers facing challenges in making substantial down payments.
In 2024, California experienced a notable rise in its FHA loan limits, reaching a new maximum cap of $498,257 for single-family homes, $637,950 for two-family properties, $771,125 for three-family properties, and $958,350 for four-family properties.
Nonetheless, certain counties in California may boast even higher limits due to their elevated median home prices.
Counties such as Los Angeles, San Francisco, San Diego, Orange, and Santa Clara are among those where you can find elevated FHA loan limits.
| SAN BERNARDINO County | |||
| RIVERSIDE-SAN BERNARDINO-ONTARIO, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $644,000 | $824,450 | $996,550 | $1,238,500 |
| SAN DIEGO County | |||
| SAN DIEGO-CHULA VISTA-CARLSBAD, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $1,006,250 | $1,288,200 | $1,557,150 | $1,935,150 |
| SAN FRANCISCO County | |||
| SAN FRANCISCO-OAKLAND-BERKELEY, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 |
| SAN LUIS OBISPO County | |||
| SAN LUIS OBISPO-PASO ROBLES, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $929,200 | $1,189,550 | $1,437,900 | $1,786,950 |
| SAN MATEO County | |||
| SAN FRANCISCO-OAKLAND-BERKELEY, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 |
| SANTA BARBARA County | |||
| SANTA MARIA-SANTA BARBARA, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $838,350 | $1,073,250 | $1,297,300 | $1,612,250 |
| SANTA CLARA County | |||
| SAN JOSE-SUNNYVALE-SANTA CLARA, CA | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 |
How does the FHA determine its loan limits?
Annually, it evaluates two key factors: the prevailing conforming conventional loan limits and the median home prices in specific areas. By referencing the national conforming loan limits set by the Federal Housing Finance Agency, the FHA establishes its own “floor” and “ceiling” limits.
FHA loans stand out as a top choice for first-time homebuyers, offering greater accessibility compared to Conventional loans. This broader eligibility makes them highly favored among diverse borrowers in California, thanks to their lower down payment and credit score requirements, along with the availability of financial assistance options.
Takeaways on FHA Loan Limits in California
Interest rates and lending standards for first time house buyers are subject to change without notice. Discuss your credit and eligibility with a licensed mortgage lender today.
BD Nationwide will help you shop and compare the best California mortgage lenders that offer FHA loans in your region. There is no cost and no obligation to apply.
