The Federal Housing Administration usually raises FHA Loan limits for the upcoming year. Like higher Conforming Loan limits, this is done to help homebuyers keep up with rising housing prices. The FHFA House Price Index (HPI®) shows that home prices appreciated by roughly 12 percent over the past year.
As a result, FHA Loan limits for 2023 rose to $472,030. Though this doesn’t mean that all FHA borrowers will qualify for this loan amount—as income, credit, and other variables still apply—it does mean that more homebuyers may now be able to afford a home in their area while still using an affordable loan program like the FHA.
Larger loan limits give homebuyers the chance to take advantage of the many FHA benefits listed above when buying a home at a higher price. These include making a lower down payment. Increased FHA limits can also give homeowners interested in a cash-out refinance access to more of their equity. FHA Loan Limits may even be higher than Conventional Loan limits in some high-cost areas.