Short answer: an FHA-insured loan cannot be larger than the FHA limit for the area where the home is. Each area limit starts at 115 percent of the area’s median home price, kept between a national floor and a national ceiling tied to the conforming loan limit. For case numbers assigned in 2026, HUD sets the one-unit floor at $541,287 and the one-unit ceiling at $1,249,125. If the price is above your area limit, you would need a larger down payment to stay within it. This page covers federal law only. It is general information, not legal or financial advice.
What the law says
The National Housing Act limits the principal of an FHA-insured single family loan to the lesser of 115 percent of the median one-family house price in the area, as HUD determines it, or 150 percent of the conforming loan limit for Freddie Mac; the limit may not be less than the greater of the area’s limit on October 21, 1998 or 65 percent of that conforming limit (12 U.S.C. 1709(b)(2)(A), LII, read October 30, 2026). The area is a metropolitan statistical area, and its median is the median of its highest priced county. Two to four unit homes get limits in the same ratio as the conforming limits for those sizes. The loan also may not exceed 100 percent of the appraised value (1709(b)(2)(B)), and the borrower must pay at least 3.5 percent of the appraised value in cash or its equivalent (1709(b)(9)(A)). HUD’s regulation applies the area limit and value limits, and an 85 percent limit for a secondary residence (24 CFR 203.18(a), eCFR, text up to date as of October 28, 2026).
2026 floor and ceiling
HUD Mortgagee Letter 2025-23, dated December 11, 2025, sets these limits for case numbers assigned on or after January 1, 2026, based on the national conforming limit of $832,750 for one unit (HUD, read October 30, 2026):
| Units | Low-cost area floor (65%) | High-cost area ceiling (150%) |
|---|---|---|
| One | $541,287 | $1,249,125 |
| Two | $693,050 | $1,599,375 |
| Three | $837,700 | $1,933,200 |
| Four | $1,041,125 | $2,402,625 |
Check: 65 percent of $832,750 is $541,287.50 which HUD lists as $541,287, and 150 percent is $1,249,125. The letter lists higher ceilings for four special exception areas with higher construction costs. HUD publishes new limits for each calendar year, so these figures are for 2026 only.
How to find your area limit
The letter points to HUD’s lookup by area and county (HUD lookup). Your area limit is the floor, the ceiling, or a figure between them, based on median prices (HUD Handbook 4000.1, Nationwide Mortgage Limits, section dated January 1, 2026, HUD). The Handbook says requests to change an area limit must reach FHA within 30 days of the yearly publication, and any change from a valid appeal applies back to January 1. Check the limit for the year your case number will be assigned.
Example: price above the limit
This example is only for the math. The area limit of $600,000 is an example figure, not a current limit for any area; the price equals the appraised value, and 96.5% is the loan-to-value figure that matches the 3.5 percent minimum cash payment. The upfront mortgage insurance premium is left out; ask the lender how it is added.
| Price | Loan at 96.5% of value | Area limit (example) | Base loan (the lower) | Down payment |
|---|---|---|---|---|
| $600,000 | $600,000 × 96.5% = $579,000 | $600,000 | $579,000 | $600,000 − $579,000 = $21,000 |
| $650,000 | $650,000 × 96.5% = $627,250 | $600,000 | $600,000 | $650,000 − $600,000 = $50,000 |
In this example, at the higher price the area limit, not the 96.5% figure, sets the loan, so the down payment rises. See FHA mortgage insurance premiums for the upfront and annual premium on the base loan. A 203(k) rehab loan has its own maximum, also capped by the area limit; see the FHA 203(k) rehab loan. A streamline refinance has its own maximum based on the old loan; see FHA streamline refinances.
Questions to ask the lender
- What is the FHA limit for my area and unit count this year?
- Is the limit based on the date my case number is assigned?
- What is my base loan amount, and how is the upfront premium added?
- What down payment do I need if the price is above the limit?
Checklist
- Look up your area on HUD’s lookup and note the year shown.
- Use the limit for the right number of units.
- Compare the price with the limit before you make an offer.
- Ask for the case number assignment date in writing.
You can submit a complaint at consumerfinance.gov/complaint.
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Sources
- LII: 12 U.S.C. 1709, Insurance of mortgages
- eCFR: 24 CFR 203.18, Maximum mortgage amounts, current text up to date as of October 28, 2026
- HUD: Mortgagee Letter 2025-23, 2026 Nationwide Forward Mortgage Loan Limits (December 11, 2025, PDF)
- HUD: FHA mortgage limits lookup by area
- HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Update 18, issued August 12, 2026), PDF
- CFPB: Submit a complaint
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.