2024 FHA Loan Limits in Minnesota

Backed by the Federal Housing Administration, FHA loans offer favorable qualification hurdles, but do come with limits on how much you can finance. For most Minnesota residents, the FHA loan limit is $498,257, but in some pricier counties like Anoka, Dakota, Hennepin, Ramsey and Washington counties, that cap goes up to $515,200.

Minnesota FHA loan limits by county

How are FHA loan limits determined?

To keep up with changing home prices, the FHA revises its loan limits annually for every county in the country. The maximum amount you can borrow in any year, however, will always be a percentage of the national conforming loan limit as determined by the Federal Housing Finance Agency for conventional loans — or mortgages that follow the rules set by Fannie Mae and Freddie Mac.

In 2024, the largest FHA loan available to homebuyers in most counties is $498,257 — or 65% of the national conforming loan limit of $766,550. Known as the loan limit “floor,” this amount represents the lowest limit of FHA loan financing. Homebuyers in major metros or pricey counties can access FHA loans worth up to the “ceiling” amount of $1,149,825 — or 150% of the same national conforming loan limit.

In Minnesota, the highest FHA loan possible tops out at $515,200, with 13 counties, including Anoka, Dakota, Hennepin and Washington, able to secure this level of financing. Across the rest of the state, the highest FHA loan amount is $498,257.

How to qualify for an FHA loan in Minnesota

Since FHA loans are backed by the government, meaning lenders will be protected from loss if you default on your repayments, these mortgages come with more flexible qualification requirements. Here are the FHA’s minimum requirements:

→ Credit score of at least 500. If your credit score sits between 500 and 579, you can still qualify for an FHA loan, but you must put down 10% or more. Those with scores of 580 or better only need to make the minimum 3.5% required down payment.

→ 3.5% down payment. As long as your credit score is 580 or higher, you can make a down payment as low as 3.5%.

→ Debt-to-income ratio of 43% or less. Lenders will check how much of your income goes toward debt repayment before approving you for a new loan. The higher the percentage, the more lenders view you as a risky borrower who may default. For this reason, the FHA typically approves those with a DTI ratio below 43%, although those with more debt may still be approved with a strong enough credit score or ample cash savings.

→ Primary residence. You must live in the home you purchase with an FHA loan for at least a year, meaning you cannot buy vacation homes or rental properties.

→ Solid work history. FHA loans have no income limits or requirements, but lenders will ask to see proof of employment for at least the past two years. So have your pay stubs, W-2s and 1099s ready.

→ FHA mortgage insurance. FHA loans come with two additional insurance costs. The first is an upfront mortgage insurance premium that costs 1.75% of the total loan amount. The second is an annual mortgage insurance premium, which can be 0.15% to 0.75% of the total loan amount.

→ Get an FHA appraisal. All homes bought with an FHA loan must pass a $400 to $700 FHA appraisal to review the value, condition and safety of the property.

Buying a multifamily property with an FHA loan

With an FHA loan, you can also buy multifamily properties that contain between two and four separate housing units with as little as 3.5% down. Functionally very similar to FHA loans for single units, these mortgages differ only in that the loan limits are much higher. To qualify for a multi-unit FHA loan, you’ll need to meet this criteria:

→ Credit score of 500 or higher. If your score is between 500 and 579, you can still get an FHA loan, but you’ll need to put down a 10% down payment. Having a credit score of at least 580 or higher means you can borrow all but 3.5% of the home’s value.

→ Live in one of the units. While you can rent out one or more of the units within your multifamily home, you must also live in one of the other units as your primary residence for at least a year.

→ FHA mortgage insurance. You’ll need to pay an upfront mortgage insurance premium of 1.75% of the total loan, as well as an annual mortgage insurance premium of 0.15% to 0.75% of the loan amount.

→ Get an FHA appraisal. Your chosen property must undergo and pass a $400 to $700 FHA appraisal before the loan can be approved.

→ Stable work history. You’ll need to show lenders proof of your income dating back at least two years. If you intend to rent some units out, you can factor those earnings into your application as well.

→ Debt-to-income ratio of 43% or less. Your total outstanding monthly debt should equal less than 43% of your monthly income.

FHA lenders in Minnesota

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