FHA Loan Requirements, Guidelines and Application Tips
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2023 FHA Loan Limits in California

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California homebuyers have more borrowing power than ever, as the Federal Housing Administration (FHA) backs loan amounts as high as $472,030 for single-family homes in 2023. Buyers looking for a one-unit home in more expensive California counties like Alameda and Los Angeles may qualify for an FHA loan amount as high as $1,089,300.

California FHA loan limits by county

County Name One unit Two unit Three unit Four unit Median Sale Price
CONTRA COSTA$1,089,300$1,394,775$1,685,850$2,095,200$1,735,000
DEL NORTE$472,030$604,400$730,525$907,900$271,000
EL DORADO$763,600$977,550$1,181,650$1,468,500$664,000
LOS ANGELES$1,089,300$1,394,775$1,685,850$2,095,200$1,120,000
SAN BENITO$1,089,300$1,394,775$1,685,850$2,095,200$1,623,000
SAN BERNARDINO$644,000$824,450$996,550$1,238,500$560,000
SAN DIEGO$977,500$1,251,400$1,512,650$1,879,850$850,000
SAN FRANCISCO$1,089,300$1,394,775$1,685,850$2,095,200$1,735,000
SAN JOAQUIN$656,650$840,650$1,016,150$1,262,800$571,000
SAN LUIS OBISPO$911,950$1,167,450$1,411,200$1,753,800$793,000
SAN MATEO$1,089,300$1,394,775$1,685,850$2,095,200$1,735,000
SANTA BARBARA$805,000$1,030,550$1,245,700$1,548,100$700,000
SANTA CLARA$1,089,300$1,394,775$1,685,850$2,095,200$1,623,000
SANTA CRUZ$1,089,300$1,394,775$1,685,850$2,095,200$1,050,000

How are FHA loan limits determined?

Each 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 limits change annually based on the average U.S. home price over the previous four quarters, and they include limits for low-cost areas and more expensive, high-cost areas.

Here’s how the calculations work:

The California low-cost limit, or “floor,” is $472,030 for a single-family home, which is equal to 65% of the 2023 national conforming loan limit of $726,200. If you’re buying a multifamily home in California, the low-cost limits increase with each unit:

  • $604,400 for a two-unit home
  • $730,525 for a three-unit home
  • $907,900 for a four-unit home

If you decide to buy in an expensive California neighborhood, the high-cost limit, or “ceiling,” is set at 150% of the conforming loan limit, which means you can borrow up to $1,089,300 for a single-family home. There are 10 counties in California that allow you to borrow up to the $1,089,300 high-cost FHA loan maximum:

  1. Alameda
  2. Contra Costa
  3. Los Angeles
  4. Marin
  5. Orange
  6. San Benito
  7. San Francisco
  8. San Mateo
  9. Santa Clara
  10. Santa Cruz

How to qualify for an FHA loan in California

FHA loans are a good backup plan if you’re not able to get a conventional mortgage because you have lower credit scores or too much debt compared to your income. With median sales prices as high as $1,735,000 in the highest-cost counties of California, the higher FHA loan amounts come in handy, especially if your credit history is not in tip-top shape.

Here’s a breakdown of the most current requirements to qualify for an FHA loan in California:

Down payment and credit score. The minimum down payment for FHA loans is 3.5% with at least a 580 credit score. You can get a gift from friends, family members and even your employer for all or part of the down payment. With a 10% down payment, an FHA loan approval is possible with a score as low as 500.

Debt-to-income ratio. FHA lenders scrutinize your total debt compared to your income to calculate your debt-to-income (DTI) ratio. The FHA guideline maximum DTI ratio is 43%, but exceptions are 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 on your mortgage payments. The first is an upfront mortgage insurance premium (UFMIP) worth 1.75% of your loan amount, which is usually added to your mortgage. The other is an annual mortgage insurance premium (MIP), which costs 0.45% to 1.05% of the loan amount and is divided by 12 and added to your monthly payment. One note: You’ll pay it regardless of the size of your down payment.

Occupancy. You must live in your home as a primary residence for at least a year if you take out an FHA loan to buy it. The program doesn’t allow financing on second homes or investment properties.

FHA home appraisals. You’ll need an FHA appraisal for any purchase loan. FHA appraisal guidelines are more stringent than guidelines for conventional loans.

Buying a multifamily property with an FHA loan

You can use the higher multifamily home FHA loan limits to buy a two-to-four-unit home, as long as you live in one of the units for a year after buying it. Qualified buyers can purchase a multifamily home with a low 3.5% down payment and use the rental income to help them qualify (conventional guidelines typically require at least a 15% down payment for multifamily purchases).

In California, this gives you more than a million dollars worth of borrowing power in the most expensive counties:

  • $1,394,775 for a two-unit home
  • $1,685,850 for a three-unit home
  • $2,095,200 for a four-unit home

FHA lenders in California

Lender nameLT ratingMinimum FHA credit score
PenFed Mortgage3 stars620
Flagstar Mortgage4 stars580
Rocket Mortgage5 stars580
Churchill Mortgage3 stars620
Guild Mortgage3 stars540

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