2020 Arizona FHA Loan Limits

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Effective January 1, 2020 FHA Max loan limit is $331,760 (for single family 1 unit homes). FHA Loan limits have risen each year for the past 4 years in Arizona and across the Country.

2020 FHA Max Loan limits are up again for Arizona and the rest of the U.S. These limits dictate the highest FHA home loan amount a borrower can obtain. In Arizona, the FHA Max loan for 2020 is $331,760 for a single family 1 unit property.

2020 Local FHA Loan Limit Search

MSA NameStateCountyOne Unit Max LoanTwo Unit Max LoanThree Unit Max LoanFour Unit Max Loan
Non-MetroArizonaApache County$331,760$424,800$513,450$638,100
Sierra Vista-DouglasArizonaCochise County$331,760$424,800$513,450$638,100
FlagstaffArizonaCoconino County$331,760$424,800$513,450$638,100
PaysonArizonaGila County$331,760$424,800$513,450$638,100
SaffordArizonaGraham County$331,760$424,800$513,450$638,100
Non-MetroArizonaGreenlee County$331,760$424,800$513,450$638,100
Non-MetroArizonaLa Paz County$331,760$424,800$513,450$638,100
Phoenix-Mesa-ScottsdaleArizonaMaricopa County$331,760$424,800$513,450$638,100
Lake Havasu City-KingmanArizonaMohave County$331,760$424,800$513,450$638,100
Show LowArizonaNavajo County$331,760$424,800$513,450$638,100
TucsonArizonaPima County$331,760$424,800$513,450$638,100
Phoenix-Mesa-ScottsdaleArizonaPinal County$331,760$424,800$513,450$638,100
NogalesArizonaSanta Cruz County$331,760$424,800$513,450$638,100
PrescottArizonaYavapai County$331,760$424,800$513,450$638,100
YumaArizonaYuma County$331,760$424,800$513,450$638,100

How are FHA Loan Limits Determined?

FHA sets loan limits a bit differently than other home loan products. Instead of establishing one singular maximum amount, FHA sets a Floor Limit and a Ceiling Limit for the year. In 2020, those FHA limits are:

  • $331,760 FHA Floor
  • $765,600 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 2019-19

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 1 unit homes in non-high cost MSA’s. Higher FHA limits exist for both single family 2, 3 and 4 unit homes as well as 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 and a few additional factors. Here is a breakdown of how it all works.

  1. Determine “Anchor” Loan Amount

    Prior to calculating the 2020 FHA floor and ceiling loan limits, HUD determines the anchor loan amount to be used. HUD/FHA uses the 2020 Max Conforming Loan Amount set by the FHFA (not to be confused with FHA). Next, HUD calculates both the floor and ceiling FHA loan limits.

  2. Calculate 2020 Floor Loan Amount

    Based on 2 factors HUD calculates FHA’s 2020 Floor Loan Amount. This is the lowest amount that any MSA can have as their Maximum FHA Loan amount for 2020. The 2 factors are:

    1. Anchor Loan Amount: $510,400 (2020 Max Conforming Loan Amount)
    2. 65% rate

    The FHA Floor Loan Amount equals the 65% rate multiplied by the anchor loan amount
    510,400 X 65% = $331,760 FHA 2020 Floor Loan Amount

  3. Calculate 2020 FHA Ceiling Loan Amount

    Using the same Anchor loan amount as in step one (the 2020 Max Conforming Loan Amount), along with a higher rate 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 2020 (except for high cost MSA’s). The 2 factors are:

    1. Anchor Loan Amount: $510,400 (2020 Max Conforming Loan Amount)
    2. 150% rate

    The FHA Ceiling Loan Amount equals the 65% rate multiplied by the anchor loan amount $510,400 X 65% = $765,600 FHA 2020 Ceiling Loan Amount

After HUD has both the 2020 FHA Floor and Ceiling loan limits the framework is set. Next, each MSA receives it’s own annual FHA Loan Limit based on loacal average home price.

Arizona FHA Loan Limits 2020

Local MSA’s 2020 FHA Loan Limits come from 3 basic criteria. 

  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 2020 FHA Loan limit. 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 2020 FHA max loan amount.

For example, an area with an average home price under the $331,760 FHA floor will adopt the $331,760 as its 2020 FHA Max Loan amount. Similarly, an area where average home prices exceed the $765,600 limit (except those noted below) take on the $765,600 2020 FHA Loan Limit.

Special FHA Loan Limit Exception Areas

Lastly, Alaska, Hawaii, Guam and the Virgin Islands have their own special and higher 2020 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 2019-19 (page 3)

2020 FHA Loan Limits are effective for all loans with FHA case numbers assigned on or after January 1, 2020.

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