FHA Loan Limit 2021

2021 Arizona FHA Loan Limit | $356,362

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Effective January 1, 2021 FHA Max loan limit in Arizona is $356,362 (for single family 1 unit homes). This is up from FHA’s 2020 cap of $331,760.

FHA Max Loan limits rose again for Arizona and the U.S. for 2021. These limits dictate the highest FHA home loan amount a borrower can obtain in a given area. In Arizona, the FHA Max loan in 2021 is $356,362 for a single family 1 unit property. Check out 2021 Conventional Loan Limits.

2021 Arizona FHA Loan Limits by MSA

MSA NameStateCountyOne Unit Max LoanTwo Unit Max LoanThree Unit Max LoanFour Unit Max Loan
Non-MetroArizonaApache County$356,362$456,275$551,500$685,400
Sierra Vista-DouglasArizonaCochise County$356,362$456,275$551,500$685,400
FlagstaffArizonaCoconino County$356,362$456,275$551,500$685,400
PaysonArizonaGila County$356,362$456,275$551,500$685,400
SaffordArizonaGraham County$356,362$456,275$551,500$685,400
Non-MetroArizonaGreenlee County$356,362$456,275$551,500$685,400
Non-MetroArizonaLa Paz County$356,362$456,275$551,500$685,400
Phoenix-Mesa-ScottsdaleArizonaMaricopa County$356,362$456,275$551,500$685,400
Lake Havasu City-KingmanArizonaMohave County$356,362$456,275$551,500$685,400
Show LowArizonaNavajo County$356,362$456,275$551,500$685,400
TucsonArizonaPima County$356,362$456,275$551,500$685,400
Phoenix-Mesa-ScottsdaleArizonaPinal County$356,362$456,275$551,500$685,400
NogalesArizonaSanta Cruz County$356,362$456,275$551,500$685,400
PrescottArizonaYavapai County$356,362$456,275$551,500$685,400
YumaArizonaYuma County$356,362$456,275$551,500$685,400

Click here to search National 2021 FHA Loan Limits

How are FHA Loan Limits Determined?

FHA sets loan limits a bit differently than other home loan products. Instead of establishing a single maximum limit, FHA sets a Floor Limit and a Ceiling Limit for the year. In 2021, those FHA limits are:

  • $356,362 FHA Floor
  • $822,375 FHA Ceiling

Also, instead of pegging all loan limits to County, FHA uses either County OR “Metropolitan Statistical Areas” or “MSA’s“. MSA’s areas are established by the US Office of Management and Budget. Typically, MSA’s consist of 1 to 4 neighboring cities.

“Loan limits are determined by the county in which a property is located, except for properties located in Metropolitan Statistical Areas (MSAs)…”

HUD Mortgagee Letter 2040-41

Each MSA in the United States receives a Max FHA Loan limit within the Floor and Ceiling amounts. The Floor and Ceiling amounts listed above are for single family homes in non-high cost MSA’s. Higher FHA limits exist for homes in high cost MSA’s.

The Math Behind FHA Max Loan Limits

Establishing FHA Max loan limits each year is based on local home price trends as well as a few additional factors. Here is how it works:

  1. Determine “Anchor” Loan Amount

    Prior to calculating the 2021 FHA floor and ceiling loan limits, HUD determines an anchor loan amount. HUD/FHA uses the 2021 Max Conforming Loan Amount set by the FHFA (not to be confused with FHA). The 2021 anchor loan amount is $548,250.

  2. Calculate 2020 Floor Loan Amount

    Based on 2 factors HUD calculates FHA’s 2021 Floor Loan Amount. This is the lowest amount that any MSA can have as their Maximum FHA Loan amount for 2021. The 2 factors are:

    1. Anchor Loan Amount: $548,250
    2. Factor: 65%

    The FHA Floor Loan Amount equals the 65% rate multiplied by the anchor loan amount
    548,250 X 65% = $356,362 – FHA 2021 Floor Loan Amount

  3. Calculate 2020 FHA Ceiling Loan Amount

    Using the Anchor loan amount along with a higher factor, HUD determines the FHA ceiling loan amount. This is the highest amount that any MSA can have as their Maximum FHA Loan amount for 2021 (except for high cost MSA’s). The 2 factors are:

    1. Anchor Loan Amount: $548,250
    2. Factor: 150%

    The FHA Ceiling Loan Amount equals the 150% rate multiplied by the anchor loan amount $548,250 = $833,375 FHA 2020 Ceiling Loan Amount

After HUD has both the 2021 FHA Floor and Ceiling loan limits established – the framework is set. Each MSA then receives it’s annual FHA Loan Max based on their local average home price and the FHA floor and ceiling limits. See below for a sample calculation.

Finalizing an MSA’s 2021 FHA Loan Max

Each states MSA’s 2021 FHA Loan Limits come from 3 basic criteria.  The are as follows:

  1. Area’s average home price
  2. FHA Floor Loan Limit
  3. FHA Ceiling Loan Limit

When an MSA’s average home prices falls within the FHA Floor and Ceiling that average home price becomes it’s 2021 FHA Loan Max. However, when an MSA’s average home price falls outside of either the FHA Floor or Ceiling the appropriate FHA limit becomes that area’s 2021 FHA max loan amount.

For example, areas/MSA’s with average home prices under the $331,760 FHA floor adopt $331,760 as its 2021 FHA Max Loan amount. Similarly, an area where average home prices exceed the $822,375 FHA Ceiling (except those noted below) take on $822,375 as their 2021 FHA Max Loan amount.

Special FHA Loan Limit Exception Areas

Lastly, Alaska, Hawaii, Guam and the Virgin Islands have their own special and higher 2021 FHA Loan limits. Learn more about high cost Counties on HUD’s site.

“Mortgage limits for the special exception areas of AK, HI, GU and VI are adjusted by FHA to account for higher costs of construction”

HUD Mortgagee Letter 2020-41 (page 3)

2021 FHA Loan Limits are effective for all loans with FHA case numbers assigned on or after January 1, 2021.

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