LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
2022 FHA Loan Limits in Alabama
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.
Alabama homebuyers looking for the flexibility of a loan backed by the Federal Housing Administration (FHA) can borrow up to $420,680 for a single-family home in any county within the state.
Alabama FHA loan limits by county
| County name | One unit | Two units | Three units | Four units | Median sales price |
|---|---|---|---|---|---|
| AUTAUGA | $420,680 | $538,650 | $651,050 | $809,150 | $185,000 |
| BALDWIN | $420,680 | $538,650 | $651,050 | $809,150 | $240,000 |
| BARBOUR | $420,680 | $538,650 | $651,050 | $809,150 | $109,000 |
| BIBB | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| BLOUNT | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| BULLOCK | $420,680 | $538,650 | $651,050 | $809,150 | $84,000 |
| BUTLER | $420,680 | $538,650 | $651,050 | $809,150 | $81,000 |
| CALHOUN | $420,680 | $538,650 | $651,050 | $809,150 | $157,000 |
| CHAMBERS | $420,680 | $538,650 | $651,050 | $809,150 | $155,000 |
| CHEROKEE | $420,680 | $538,650 | $651,050 | $809,150 | $130,000 |
| CHILTON | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| CHOCTAW | $420,680 | $538,650 | $651,050 | $809,150 | $89,000 |
| CLARKE | $420,680 | $538,650 | $651,050 | $809,150 | $135,000 |
| CLAY | $420,680 | $538,650 | $651,050 | $809,150 | $61,000 |
| CLEBURNE | $420,680 | $538,650 | $651,050 | $809,150 | $140,000 |
| COFFEE | $420,680 | $538,650 | $651,050 | $809,150 | $153,000 |
| COLBERT | $420,680 | $538,650 | $651,050 | $809,150 | $171,000 |
| CONECUH | $420,680 | $538,650 | $651,050 | $809,150 | $97,000 |
| COOSA | $420,680 | $538,650 | $651,050 | $809,150 | $131,000 |
| COVINGTON | $420,680 | $538,650 | $651,050 | $809,150 | $98,000 |
| CRENSHAW | $420,680 | $538,650 | $651,050 | $809,150 | $97,000 |
| CULLMAN | $420,680 | $538,650 | $651,050 | $809,150 | $139,000 |
| DALE | $420,680 | $538,650 | $651,050 | $809,150 | $93,000 |
| DALLAS | $420,680 | $538,650 | $651,050 | $809,150 | $55,000 |
| DEKALB | $420,680 | $538,650 | $651,050 | $809,150 | $70,000 |
| ELMORE | $420,680 | $538,650 | $651,050 | $809,150 | $185,000 |
| ESCAMBIA | $420,680 | $538,650 | $651,050 | $809,150 | $153,000 |
| ETOWAH | $420,680 | $538,650 | $651,050 | $809,150 | $165,000 |
| FAYETTE | $420,680 | $538,650 | $651,050 | $809,150 | $65,000 |
| FRANKLIN | $420,680 | $538,650 | $651,050 | $809,150 | $85,000 |
| GENEVA | $420,680 | $538,650 | $651,050 | $809,150 | $155,000 |
| GREENE | $420,680 | $538,650 | $651,050 | $809,150 | $200,000 |
| HALE | $420,680 | $538,650 | $651,050 | $809,150 | $200,000 |
| HENRY | $420,680 | $538,650 | $651,050 | $809,150 | $155,000 |
| HOUSTON | $420,680 | $538,650 | $651,050 | $809,150 | $155,000 |
| JACKSON | $420,680 | $538,650 | $651,050 | $809,150 | $107,000 |
| JEFFERSON | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| LAMAR | $420,680 | $538,650 | $651,050 | $809,150 | $97,000 |
| LAUDERDALE | $420,680 | $538,650 | $651,050 | $809,150 | $171,000 |
| LAWRENCE | $420,680 | $538,650 | $651,050 | $809,150 | $159,000 |
| LEE | $420,680 | $538,650 | $651,050 | $809,150 | $245,000 |
| LIMESTONE | $420,680 | $538,650 | $651,050 | $809,150 | $227,000 |
| LOWNDES | $420,680 | $538,650 | $651,050 | $809,150 | $185,000 |
| MACON | $420,680 | $538,650 | $651,050 | $809,150 | $97,000 |
| MADISON | $420,680 | $538,650 | $651,050 | $809,150 | $227,000 |
| MARENGO | $420,680 | $538,650 | $651,050 | $809,150 | $101,000 |
| MARION | $420,680 | $538,650 | $651,050 | $809,150 | $79,000 |
| MARSHALL | $420,680 | $538,650 | $651,050 | $809,150 | $142,000 |
| MOBILE | $420,680 | $538,650 | $651,050 | $809,150 | $135,000 |
| MONROE | $420,680 | $538,650 | $651,050 | $809,150 | $65,000 |
| MONTGOMERY | $420,680 | $538,650 | $651,050 | $809,150 | $185,000 |
| MORGAN | $420,680 | $538,650 | $651,050 | $809,150 | $159,000 |
| PERRY | $420,680 | $538,650 | $651,050 | $809,150 | $84,000 |
| PICKENS | $420,680 | $538,650 | $651,050 | $809,150 | $200,000 |
| PIKE | $420,680 | $538,650 | $651,050 | $809,150 | $129,000 |
| RANDOLPH | $420,680 | $538,650 | $651,050 | $809,150 | $115,000 |
| RUSSELL | $420,680 | $538,650 | $651,050 | $809,150 | $261,000 |
| SHELBY | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| ST. CLAIR | $420,680 | $538,650 | $651,050 | $809,150 | $255,000 |
| SUMTER | $420,680 | $538,650 | $651,050 | $809,150 | $89,000 |
| TALLADEGA | $420,680 | $538,650 | $651,050 | $809,150 | $105,000 |
| TALLAPOOSA | $420,680 | $538,650 | $651,050 | $809,150 | $131,000 |
| TUSCALOOSA | $420,680 | $538,650 | $651,050 | $809,150 | $200,000 |
| WALKER | $420,680 | $538,650 | $651,050 | $809,150 | $77,000 |
| WASHINGTON | $420,680 | $538,650 | $651,050 | $809,150 | $135,000 |
| WILCOX | $420,680 | $538,650 | $651,050 | $809,150 | $95,000 |
| WINSTON | $420,680 | $538,650 | $651,050 | $809,150 | $114,000 |
How are FHA loan limits determined?
Every year FHA loan limits are set based on a percentage of the conforming loan limits published by the Federal Housing Finance Agency (FHFA) for conventional loans. The adjustments reflect changes in the average U.S. home price over the past year and include a limit for low-cost areas, as well as more expensive high-cost areas.
Here’s how the calculations work:
The low-cost limit or “floor” is $420,680 for a single-family home, which is 65% of the national conforming loan limit of $647,200 in 2022. If you’re buying a multifamily home, the low-cost limits increase with each unit:
- $538,650 for a two-unit home
- $651,050 for a three-unit home
- $809,150 for a four-unit home
If you’re buying a home near an expensive metropolitan area of the country, the high-cost limit is set at 150% of the conforming loan limit, which allows you to borrow up to $970,800 for a single-family home. Also known as the “ceiling,” this amount also provides more borrowing power for multifamily homes:
- $1,243,050 for a duplex
- $1,502,475 for a triplex
- $1,867,275 for a fourplex
In case you’re wondering, there are no “high-cost” counties in the state of Alabama — the low-cost limits apply to all counties in the state.
How to qualify for an FHA loan in Alabama
FHA loans may be a good choice if you’re having trouble qualifying for a conventional mortgage. With the median home price topping out at $255,000 for the most expensive counties in the state (as of January 2022), you won’t have to worry about borrowing more than the $420,680 one-unit home limit.
Here’s a breakdown of the most current requirements to qualify for an FHA loan in Alabama:
Down payment and credit score. You’ll need a 3.5% down payment and a credit score of at least 580. The money can come from friends, family and even employers. Although the FHA does lend money to borrowers with scores as low as 500, you’ll need at least a 10% down payment to qualify.
Debt-to-income (DTI) ratio. The FHA measures how much monthly debt you carry compared to your income to calculate your DTI ratio. The guideline maximum for your total debt plus your new mortgage payment is 43%, but exceptions may be possible with strong credit scores or extra cash reserves.
Mortgage insurance. You’ll pay two types of FHA mortgage insurance to protect lenders in case you default. The first is an upfront mortgage insurance premium (UFMIP) of 1.75% of your loan amount, which is usually added to your mortgage balance. The other is an annual mortgage insurance premium (MIP) of 0.45% to 1.05% of the loan amount, divided by 12 and added to your monthly payment. One note about FHA mortgage insurance: You’ll pay it regardless of your down payment amount.
Occupancy. You’ll have to live in the home you purchase with an FHA loan as your primary residence. The program doesn’t allow financing on second homes or rental properties.
FHA home appraisals. The FHA requires appraisals for any purchase loan, and FHA appraisal guidelines are stricter than conventional loans.
Buying a multifamily home with an FHA loan
One unique feature of FHA loans is the ability to buy a multifamily home with a low down payment, and use the rental income to help you qualify for the loan. As long as you plan to live in the home for at least 12 months after you purchase it, you can use the higher multifamily FHA loan limits to buy up to a four-unit home with only a 3.5% down payment. The rent from the other units can be added to your qualifying income.
If you don’t mind becoming a homeowner and a landlord at the same time, this is a great way to buy a home and let your tenants help you build equity with their rent checks.
FHA lenders in Alabama
| Lender name | LT rating | Minimum FHA credit score |
|---|---|---|
| AmeriSave Mortgage | 8/10 | 600 |
| Fairway Independent Mortgage | 8/10 | 600 |
| Guaranteed Rate Mortgage | 9/10 | 620 |
| BMO Harris Bank | 8.5/10 | 580 |
| Rocket Mortgage | 9.5/10 | 580 |