- In 2022, you can borrow up to $ 647,200 with a compliant loan in most areas of the United States.
- In areas where the cost of living is higher, you may be able to borrow up to $ 970,800.
- To borrow more than the FHFA allows for compliant loans in 2022, consider applying for a jumbo loan.
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What are the compliant loan limits for 2022?
Each year, the Federal Housing Finance Agency (FHFA) adjusts the amount you can borrow with a compliant loan, which is likely what you would consider a “regular mortgage”.
In 2022, the loan limit for a single-family home in most areas of the United States will be $ 647,200. In the more expensive parts of the country, like Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the limit drops to $ 970,800.
These limits have increased since 2021. The borrowing limit for a single unit in 2021 was $ 548,250 in most parts of the country and $ 822,375 in high-cost areas.
These are the borrowing limits for single-family homes, but you can borrow more for two, three, and four-unit homes. To see the limit in your city, see the county-by-county guide on the FHFA website.
What to do if you don’t qualify for a compliant loan in 2022
If you want to borrow more than the FHFA allows in 2022, a jumbo loan may be an option. Jumbo loans are simply mortgages for people who need more than the FHFA normally allows. They generally have stricter eligibility requirements and higher interest rates than compliant loans. Jumbo loans are riskier for lenders, so companies make it harder to qualify to reduce the likelihood that a borrower will default.
Each lender has their own requirements for jumbo loans, but you will likely need a higher credit score, lower debt-to-income ratio, and a larger down payment than for a compliant loan. Expect to need at least a credit score of 700 and 20% or more for a down payment. You may also need a debt-to-income ratio (DTI) of 36% to 45%.
The better your credit score, DTI ratio, and down payment, the more you might be allowed to borrow with a jumbo loan.
What if your credit and debt profiles weren’t strong enough for a compliant or jumbo loan? You may want to apply for an FHA mortgage, which is for people with a credit score as low as 580 and a DTI ratio of 43% or less. The borrowing limit depends on where you live, and you can find the limit for your county here.
You can qualify for a VA mortgage if you are in the military, or a USDA mortgage if you are buying in a rural area. None of these types of home loans require a down payment. VA mortgages have no borrowing limit, and USDA mortgages generally have the same limits as compliant loans.