FHA Loan Limits in Massachusetts
Mortgage loans backed by the Federal Housing Administration (FHA) offer low down payments and can be easier to qualify for than conventional mortgages. The FHA loan limits in Massachusetts vary depending on the county. For Berkshire, Franklin, Hampden, Hampshire and Worcester counties, the limit is $472,030. The limit rises to $661,250 in the Providence metro area and $828,000 in the Boston metro area. For Dukes and Nantucket counties, the FHA loan limit is $1,089,300.
Massachusetts FHA loan limits by county
| County name | One unit | Two unit | Three unit | Four unit | Median sale price |
|---|---|---|---|---|---|
| BARNSTABLE | $701,500 | $898,050 | $1,085,550 | $1,349,050 | $610,000 |
| BERKSHIRE | $472,030 | $604,400 | $730,525 | $907,900 | $288,000 |
| BRISTOL | $661,250 | $846,500 | $1,023,250 | $1,271,650 | $575,000 |
| DUKES | $1,089,300 | $1,394,775 | $1,685,850 | $2,095,200 | $1,273,000 |
| ESSEX | $828,000 | $1,060,000 | $1,281,300 | $1,592,350 | $720,000 |
| FRANKLIN | $472,030 | $604,400 | $730,525 | $907,900 | $356,000 |
| HAMPDEN | $472,030 | $604,400 | $730,525 | $907,900 | $356,000 |
| HAMPSHIRE | $472,030 | $604,400 | $730,525 | $907,900 | $356,000 |
| MIDDLESEX | $828,000 | $1,060,000 | $1,281,300 | $1,592,350 | $720,000 |
| NANTUCKET | $1,089,300 | $1,394,775 | $1,685,850 | $2,095,200 | $2,195,000 |
| NORFOLK | $828,000 | $1,060,000 | $1,281,300 | $1,592,350 | $720,000 |
| PLYMOUTH | $828,000 | $1,060,000 | $1,281,300 | $1,592,350 | $720,000 |
| SUFFOLK | $828,000 | $1,060,000 | $1,281,300 | $1,592,350 | $720,000 |
| WORCESTER | $472,030 | $604,400 | $730,525 | $907,900 | $400,000 |
How are FHA loan limits determined?
FHA loan limits are determined each year based on the percentage of conforming loan limits set by the Federal Housing Finance Agency (FHFA). Limits change annually based on the median home prices.
The U.S. Department of Housing and Urban Development (HUD) uses the conforming loan limit to determine the FHA loan limits. The limit in lower cost housing markets — also called the “floor” — is $472,030, which is 65% of the national conforming loan limit of $726,200. The highest limit — called the “ceiling” — is 150% of the conforming loan limit or $1,089,300. The ceiling only applies in high-cost housing markets, which includes several Massachusetts counties.
How to qualify for an FHA loan in Massachusetts
Qualifying for an FHA loan in Massachusetts is generally more flexible than qualifying for a conventional loan. You need less money for a down payment with an FHA loan, and you may qualify even if you have a lower credit score or have had a bankruptcy or foreclosure in your past. While first-time buyers often choose FHA loans, they are available for repeat buyers, too.
You’ll still need to meet the basic requirements for an FHA loan, including:
- Minimum 500 credit score. If you have a credit score between 500 and 579, you may be eligible for an FHA loan but you’ll need to make a 10% down payment.
- Minimum down payment of 3.5%. If your credit score is 580 or higher, you may qualify for a down payment of 3.5% on a home with an FHA loan.
- Debt-to-income (DTI) ratio of 43% or less. Lenders look at your debt-to-income ratio, which divides your monthly income by monthly debt payments, to measure your ability to take on a mortgage loan. To qualify, aim for a DTI of 43%, but higher debt-to-income ratios may be acceptable if you have a high credit score or extra cash reserves.
- Mortgage insurance. Two types of FHA mortgage insurance are required for FHA borrowers. First, you’ll pay an upfront mortgage insurance premium (UFMIP), which is 1.75% of your total loan amount and due at closing. Then, you’ll pay monthly insurance premiums (MIP) from 0.15% to 0.75% of your loan amount divided by 12.
- FHA appraisal. The home you purchase with an FHA loan must go through an FHA appraisal to verify its value and condition. FHA appraisals tend to be stricter than conventional home appraisals.
- Occupancy. The home you purchase with an FHA loan must be your primary residence for at least 12 months.
Buying a multifamily property with an FHA loan
FHA loans aren’t just limited to single-family homes. You can finance a multifamily property of two to four units with an FHA loan with just 3.5% as a down payment. The loan limits increase along with the number of units in a multifamily property.
While multifamily properties can be a great way to earn income and build equity, it can be time consuming to be a landlord. There are numerous pros and cons to buying a multifamily property.
FHA lenders in Massachusetts
To get your home search started, here are some FHA lenders in Massachusetts:
| Lender name | LT rating | Minimum FHA credit score |
|---|---|---|
| Better Mortgage | 5 stars | 580 |
| Guaranteed Rate | 5 stars | Not disclosed |
| Rocket Mortgage | 5 stars | 580 |
| PennyMac Mortgage | 5 stars | 580 |