2023 FHA Loan Limits in Vermont
If you’ve been dreaming of buying a home in Vermont, you may be able to qualify for a more affordable loan backed by the Federal Housing Administration (FHA). Unlike conventional loans, an FHA loan can help borrowers who need a smaller minimum down payment or a less stringent credit score requirement.
The FHA loan limit for a single-family home in Vermont is $472,030 in most of the state but rises to $492,200 in the area around Burlington, its most populous city.
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Vermont FHA loan limits by county
| County name | One unit | Two units | Three units | Four units | Median sale price |
|---|---|---|---|---|---|
| ADDISON | $472,030 | $604,400 | $730,525 | $907,900 | $285,000 |
| BENNINGTON | $472,030 | $604,400 | $730,525 | $907,900 | $261,000 |
| CALEDONIA | $472,030 | $604,400 | $730,525 | $907,900 | $171,000 |
| CHITTENDEN | $492,200 | $630,100 | $761,650 | $946,550 | $428,000 |
| ESSEX | $472,030 | $604,400 | $730,525 | $907,900 | $100,000 |
| FRANKLIN | $492,200 | $630,100 | $761,650 | $946,550 | $428,000 |
| GRAND ISLE | $492,200 | $630,100 | $761,650 | $946,550 | $428,000 |
| LAMOILLE | $472,030 | $604,400 | $730,525 | $907,900 | $300,000 |
| ORANGE | $472,030 | $604,400 | $730,525 | $907,900 | $275,000 |
| ORLEANS | $472,030 | $604,400 | $730,525 | $907,900 | $179,000 |
| RUTLAND | $472,030 | $604,400 | $730,525 | $907,900 | $200,000 |
| WASHINGTON | $472,030 | $604,400 | $730,525 | $907,900 | $250,000 |
| WINDHAM | $472,030 | $604,400 | $730,525 | $907,900 | $260,000 |
| WINDSOR | $472,030 | $604,400 | $730,525 | $907,900 | $275,000 |
How are FHA loan limits determined?
Every year the U.S. Department of Housing and Urban Development (HUD) sets a maximum FHA loan amount for every county in the country. These limits are based on the national conforming loan limits established by the Federal Housing Finance Agency (FHFA), which in turn are based on median home sale prices in each county. As housing prices go up, so do the limits for both conforming and FHA loans. For 2023, the conforming loan limit is $726,200, up 12% from 2022.
The size of an FHA-backed loan can only go as high as the loan limit for the county in which the financed property is located. The lowest national FHA loan limit, also known as the “floor,” is 65% of the conforming loan limit. For 2023, this is $472,030. On the other side, the highest national FHA loan limit, or “ceiling,” is calculated at 150% of the conforming loan limit. For 2023, the ceiling is $1,089,300, but it only applies to high-cost areas.
How to qualify for an FHA loan in Vermont
Qualifying for an FHA loan is typically easier than qualifying for a conventional mortgage loan. However, borrowers will still need to satisfy certain FHA loan requirements:
A minimum 3.5% down payment. Borrowers with a credit score of at least 580 may be able to secure an FHA loan with a down payment of just 3.5%.
A minimum 500 credit score. The lowest accepted credit score for an FHA-insured loan is 500, and a credit score that falls between 500 and 579 will require a down payment of 10% or more. You can check your credit score online.
An FHA home appraisal. Regardless of the size of your down payment, an FHA loan will need to pass the strict guidelines of an FHA home appraisal.
A debt-to-income (DTI) ratio of 43% or less. Lenders look at your DTI ratio to compare your monthly debt spending to your income. With an FHA loan, your DTI ratio will generally need to be 43% or lower, although some lenders may still qualify you with a higher DTI.
Mortgage insurance. FHA loans require two types of mortgage insurance. The upfront mortgage insurance premium (UFMIP) is equal to 1.75% of the total loan amount and can be rolled into your mortgage. The annual mortgage insurance premium (MIP) costs from 0.45% to 1.05% of the total loan amount and is broken into 12 monthly installments that are added to your monthly mortgage bill.
Live in the home you buy. An FHA loan can’t be used to buy a secondary home or investment property. Both single-family and multifamily properties purchased with an FHA loan must be used as the borrower’s primary residence for at least a year after purchase.
Buying a multifamily property with an FHA loan
FHA-insured loans aren’t just for single-family properties — they can also be used to purchase multifamily properties with up to four separate living units. One advantage to an FHA loan is that as long as you live in one of those units for at least 12 months, you could qualify for a down payment of just 3.5% and still collect rental income.
FHA lenders in Vermont
| Lender name | LT rating | Minimum FHA credit score |
|---|---|---|
| Better Mortgage | 5 stars | 580 |
| AmeriSave | 3.5 stars | 600 |
| BMO Harris Bank | 4 stars | 580 |
| Rocket Mortgage | 5 stars | 580 |