FHA Loan Limits in Rhode Island
Mortgage loans backed by the Federal Housing Administration (FHA) can offer a more accessible path to homebuying for people with lower credit scores and limited down payment funds. Homebuyers in Rhode Island looking to get an FHA loan can borrow up to $661,250 for a single-family home in all counties. Here’s more on what to know about securing an FHA loan in Rhode Island.
Rhode Island FHA loan limits by county
| County Name | One unit | Two units | Three units | Four units | Median sale price |
|---|---|---|---|---|---|
| BRISTOL | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
| KENT | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
| NEWPORT | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
| PROVIDENCE | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
| WASHINGTON | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
How are FHA loan limits determined?
Each year the Federal Housing Finance Agency (FHFA) analyzes the previous year’s median home sales prices and sets a national conforming loan limit. Then the U.S. Department of Housing and Urban Development (HUD) uses the conforming loan limit to set FHA loan limits for each U.S. county.
The lowest national FHA limit, called the floor, is 65% of the conforming loan limit, and the highest, known as the ceiling, is 150% of this limit. The national floor is $472,030 and the ceiling is $1,089,300.
The max FHA loan limit in Rhode Island is $661,250 for a single-family home.
How to qualify for an FHA loan in Rhode Island
FHA loans in Rhode Island have less stringent down payment and credit score requirements, which makes them more accessible for homebuyers who might struggle with conventional loan requirements.
If you’re interested in an FHA loan, you’ll need to meet the following minimum requirements to qualify:
A minimum 3.5% down payment. A credit score of 580 or higher qualifies you for a 3.5% down payment, but a lower score will require a higher down payment.
A 500 credit score or better. A credit score of 500 to 579 will require at least 10% down.
A debt-to-income (DTI) ratio of 43% or less. Lenders consider your DTI ratio to determine whether you can afford a mortgage, based on your monthly debts and income. A DTI below 43% is typically required for an FHA loan, although some lenders may be willing to make exceptions.
An FHA home appraisal. Before you close, an FHA home appraisal is required.
Mortgage insurance. For FHA loans, you’ll have to pay two types of mortgage insurance. The annual mortgage insurance premium (MIP) is 0.15% to 0.75% of your loan amount, while the upfront mortgage insurance premium (UFMIP) is 1.75% of your loan amount. Typically, UFMIP costs are rolled into the mortgage, while the MIP is added to your monthly payment.
Occupancy. FHA loan borrowers must live in the home they purchase for at least a year, and it must be their primary residence.
Buying a multifamily property with an FHA loan
With an FHA loan, you can also buy a multifamily home for just 3.5% down. Properties of up to four separate living units qualify, with the stipulation that you live in one unit for at least a year.
FHA lenders in Rhode Island
| Lender name | LT rating | Minimum FHA credit score |
|---|---|---|
| TD Bank | 4 stars | 620 |
| Mr. Cooper | 4.5 stars | Not disclosed |
| Truist Mortgage | 4 stars | 580 |
| Sebonic Financial | 3 stars | 550 |