What are the limits of a FHA loan?

10 Replies

So if I am looking a legal 4-unit multi-family at a list price of $899,000, would I be able to find a lender who is willing to approve an FHA loan with 3.5% down?

Originally posted by @Wayne Brooks :

Google up fha limits for your zip code.....it varies city to city.

 I just did that and found that for a 4-unit in Chicago the limit is $703,250.

But now my next question is, are the lenders out there willing to lend this much even though it is approved?

Originally posted by @Jun Zao :
Originally posted by @Michael Cohen:

Yes they will lend to you, but not as an FHA loan. HUD writes the guidelines, and lenders follow the limits they are given.

 I don't understand.

If not FHA, then what?

A legal 4 has a loan limit of $703k. You can buy it for whatever you want, you just pay the difference between the purchase price and the loan limit. Here are the Chicago specific loan limits for FHA and the 5% down conventional program

Originally posted by @Brie Schmidt :
Originally posted by @Jun Zao:
Originally posted by @Michael Cohen:

Yes they will lend to you, but not as an FHA loan. HUD writes the guidelines, and lenders follow the limits they are given.

 I don't understand.

If not FHA, then what?

A legal 4 has a loan limit of $703k. You can buy it for whatever you want, you just pay the difference between the purchase price and the loan limit. Here are the Chicago specific loan limits for FHA and the 5% down conventional program

But I was on the lendingTree website. For a purchase price of more than 300,000 the query outputted no lenders for FHA loans.

Lending Tree is a joke of a source. Find a Local fha lender, preferably Not a big bank as they often have overlays more restrictive than the fha guidelines.

Originally posted by @Jun Zao :
Originally posted by @Brie Schmidt:
Originally posted by @Jun Zao:
Originally posted by @Michael Cohen:

Yes they will lend to you, but not as an FHA loan. HUD writes the guidelines, and lenders follow the limits they are given.

 I don't understand.

If not FHA, then what?

A legal 4 has a loan limit of $703k. You can buy it for whatever you want, you just pay the difference between the purchase price and the loan limit. Here are the Chicago specific loan limits for FHA and the 5% down conventional program

But I was on the lendingTree website. For a purchase price of more than 300,000 the query outputted no lenders for FHA loans.

 I don't know about lending tree, find a local lender.  Either way you can't put 3.5% down on that property.  

@Jun Zao

I am glad to answer any FHA questions that you have. FHA is a low down payment program only requiring you to pay 3.5% down. Cook County has a limit of $703,250 as you have stated. Conventional has a limit of $815,650 but you will be required to put down a minimum of 20%. You would have to pay the difference as well above any of these ceiling limits. The only financing that will go above these limits would be a Jumbo loan, but that is going to be difficult for a 4 unit property.

FHA also has a self sufficiency rule, that you have to when you to abide by when you are Purchasing a 3-4 unit multi-family - The full fair market rent determined by the appraiser must meet or exceed the mortgage payment. Also including a 25% vacancy factor.

I am always glad to answer any questions that you have on FHA Financing.

@Brie Schmidt has an excellent reputation on this site and can guide you with finding a property that fits your budget, and qualifications.

Originally posted by @Brie Schmidt:
Originally posted by @Jun Zao:
Originally posted by @Michael Cohen:

Yes they will lend to you, but not as an FHA loan. HUD writes the guidelines, and lenders follow the limits they are given.

 I don't understand.

If not FHA, then what?

A legal 4 has a loan limit of $703k. You can buy it for whatever you want, you just pay the difference between the purchase price and the loan limit. Here are the Chicago specific loan limits for FHA and the 5% down conventional program

 UPDATE:  Chicago increases the conventional loan limits as of Monday

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