New FHA Loan Limits for 2021

How to Choose the Right Realtor for Homebuyers in Albuquerque

Finding the right Realtor is crucial when buying a home in Albuquerque. The relationship between a Realtor and your Loan Officer is a very intimate one—if your Loan Officer has strong opinions on the matter and you haven’t decided yet, using a recommendation from them can provide peace of mind and result in a smoother, less stressful transaction. The right agent will help you navigate local neighborhoods, negotiate effectively, and streamline paperwork. Here are five concise steps to ensure you select a buyer’s agent who knows our market inside and out.

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March 10, 2021

New FHA loan limits were recently announced—great news for both buyers and homeowners looking to refinance. If you’re unfamiliar with how these limits work or why they matter, here’s a quick overview.

Why FHA Loan Limits Matter

When applying for an FHA loan, there’s a maximum borrowing amount. If you exceed this, the loan becomes a “jumbo loan,” making you ineligible for standard FHA benefits. The Department of Housing and Urban Development (HUD) increased these loan limits in 2021 for most areas of the U.S., expanding access to FHA advantages for a wider range of homebuyers.

How FHA Loan Limits Are Determined

FHA limits differ from conventional loans, like those backed by Fannie Mae or Freddie Mac, and are influenced by:

Geographic area – limits vary based on whether the area is considered high- or low-cost.
Property type – single-family homes have lower limits than multi-unit properties.
Market factors – average income levels, home prices, and demand influence the cap.

So, for example, a duplex in a high-cost area will have a much higher limit than a single-family home in a rural region.

New 2021 FHA Loan Limits

For 2021, FHA loan limits range from $356,362 to $822,375 depending on location and property type.

In low-cost counties, the cap for a single-family home is $356,362.
In high-cost areas, that cap increases to $822,375.

The best way to determine the FHA loan limit in your area is by using the [HUD loan limit search tool] (make this red) on their official website. You can also reach out to your real estate agent or mortgage professional for help identifying your county-specific limits.

What About Reverse Mortgages?

FHA also insures conforming Home Equity Conversion Mortgages (HECMs), or reverse mortgages. Unlike regular FHA loans, these have one national limit—$822,375 for 2021, up from $765,600 in 2020.

Benefits of FHA Loans in 2021

With the combination of:

Increased loan limits
Lenient credit score requirements
Low down payment options

…it’s easy to see why so many buyers and homeowners are excited.

If you’re ready to purchase or refinance with an FHA loan, [start your pre-qualification online] (make this red) and see what’s possible.

Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.

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