Homebuyers putting as little as 3.5 percent down will be able to borrow at least $541,287 in low-cost markets next year and as much as $1.249 million in high-cost markets like New York, San Francisco and Washington, D.C., after a 3.26 percent increase in 2026 FHA loan limits announced Thursday goes into effect on Jan. 1.
The ceiling for single-family homes in Alaska and Hawaii is being raised to more than $1.87 million in recognition of higher construction costs in those states.
The higher loan limits on mortgages backed by the Federal Housing Administration (FHA) track similar increases for conforming loans eligible for purchase by Fannie Mae and Freddie Mac.
Fannie and Freddie’s 2026 conforming loan limit for single-family homes will be $832,750 in most markets and up to $1,249,125 in high-cost markets, the Federal Housing Finance Agency (FHFA) announced on Nov. 25.
FHA loan limits vary by county or Metropolitan Statistical Area (MSA) and are typically equal to 115 percent of the median home price for that market.
A minimum national loan limit floor allows buyers in low-cost markets to qualify for loans that exceed 115 percent of the median home price, while ceilings in high-cost markets prevent the FHA from having to insure homes that are considered out of reach for most first-time homebuyers.
2026 FHA loan floors and ceilings
FHA’s 2026 minimum national loan limit floor for one-unit properties is $541,287, which is 65 percent of Fannie and Freddie’s conforming loan limit. That’s up $17,062 from the 2025 floor of $524,225.
The maximum loan limit ceiling in most high-cost areas is 150 percent of the conforming limit, or $1,249,125 for one-unit properties, a $39,375 increase from 2024.
To account for higher construction costs in Alaska, Hawaii, Guam and the U.S. Virgin Islands, the new FHA ceiling in those markets is $1,873,625, up $59,000 from $1,814,625 in 2024. The 2025 ceiling for four-unit properties in those markets is $3,603,925.
Thanks to their low down payment and credit score requirements, the vast majority of FHA-backed purchase mortgages (more than 80 percent) are taken out by first-time homebuyers.
FHA delinquencies on the rise
Mortgage delinquency rates by loan type. Source: ICE Mortgage Monitor, December 2025.
But delinquency rates on FHA loans are on the rise, and are currently more than five times higher than those for loans backed by Fannie Mae and Freddie Mac (the government-sponsored entities, or “GSEs”).
Nearly 12 percent of FHA borrowers were behind on their payments in October, compared with the 3.34 percent average for all mortgage holders and less than 2 percent for loans backed by Fannie and Freddie, according to data tracked by ICE Mortgage Technology.
Because they start out with less equity in their homes, ICE data shows FHA buyers are also more likely to end up underwater or in foreclosure when home prices fall.
Private mortgage insurers compete with FHA and VA loan programs to serve homebuyers who can’t afford to make a big down payment. Fannie Mae and Freddie Mac require private mortgage insurance when homebuyers put less than 20 percent down.
FHA premium cuts in 2015 and 2023 made FHA loans more attractive than conforming mortgages with private mortgage insurance for many borrowers putting down less than 5 percent, according to an analysis by the Urban Institute.
But borrowers with FICO scores at or above 700 can often get a better deal by taking out a conforming loan backed by Fannie or Freddie with private mortgage insurance, the analysis found.
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