FHA Loans: What You Need to Know in 2022
How Does LendingTree Get Paid?

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears 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 New Jersey

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.

Qualified homebuyers in many New Jersey counties can get a loan backed by the Federal Housing Administration (FHA) for up to $970,800 in 2022 to buy a single-family home. More than half of the Garden State’s counties qualify for the maximum high-cost limit, although there are still three counties capped at the FHA low-cost limit of $420,680 for a one-unit home.

New Jersey FHA loan limits by county

County NameOne unitTwo unitThree unitFour unitMedian Sales Price
CAPE MAY$489,900$627,150$758,100$942,100$426,000

How are FHA loan limits determined?

Each year FHA loan limits change based on a percentage of the conforming loan limits published by the Federal Housing Finance Agency (FHFA) for conventional loans. Different limits are set for low- and high-cost areas of any given state.

Here’s how the FHA loan limits are calculated:

The low-cost limit, or “floor,” is $420,680 in 2022 for a single-family home. This limit is set at 65% of the 2022 national conforming loan limit of $647,200. There are only three low-cost counties in the state of New Jersey: Atlantic, Cumberland and Warren.

The high-cost limit is set at 150% of the conforming loan limit, which means you could borrow up to $970,800 for a single-family home. That’s good news for New Jersey homebuyers, where 12 counties saw median sales prices rise to $995,000 this past year. Here are the counties where the high-cost limits apply:

  • Bergen
  • Hudson
  • Hunterdon
  • Middlesex
  • Monmouth
  • Morris
  • Essex
  • Ocean
  • Passaic
  • Somerset
  • Sussex
  • Union

How to qualify for an FHA loan in New Jersey

FHA loans come in handy if you need to buy a home with a low down payment and low credit scores. Homebuyers often choose the program if they can’t qualify for a conventional loan.
Here are the minimum qualifying requirements for an FHA loan in New Jersey:

  • Down payment and credit score. You can make a 3.5% down payment as long as you have a minimum 580 credit score. Some lenders will approve borrowers with scores down to 500 and a 10% down payment.
  • Debt-to-income ratio. Lenders measure your debt-to-income (DTI) ratio to gauge how much total monthly debt you have compared to your before-tax income. Although they prefer a DTI ratio of 43% or lower, exceptions are possible for borrowers with high credit scores or extra savings.
  • Mortgage insurance. There are two types of FHA mortgage insurance required on FHA loans regardless of your down payment. The first is a lump-sum upfront mortgage insurance premium (UFMIP), worth 1.75% of your loan amount, which is usually added to your mortgage. The second is an annual mortgage insurance premium (MIP), which costs 0.45% to 1.05% of the loan amount. The MIP cost is divided by 12 and added to your monthly payment.
  • Occupancy. You must live in the home you buy with an FHA loan as your primary residence for at least a year.
  • FHA home appraisals. The FHA requires an appraisal for all purchase loans. FHA appraisal guidelines are stricter than conventional loan guidelines.

Buying a multifamily home with an FHA loan

In the high-cost areas of New Jersey, you may be able to borrow more than a million dollars to buy a multifamily home with a 3.5% down payment and add the rental income to your qualifying income. However, you’ll have to live in one of the units as your primary residence for at least a year. Conventional guidelines typically require a 15% down payment or more. Here are the high-cost FHA loan limits for two- to four-unit homes in New Jersey:

  • $1,243,050 for two units
  • $1,502,475 for three units
  • $1,867,275 for four units

FHA lenders in New Jersey

Lender nameLT ratingMinimum FHA credit score
Churchill Mortgage8/10620
Caliber Mortgage8/10620
Rocket Mortgage9.5/10580
AmeriSave Mortgage8/10600


Compare FHA Loans for Free

Recommended Reading