Homes in my areas are too expensive for FHA Loan Limits

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Homes in my areas are too expensive for FHA  Loan Limits

Don't fool yourself into believing that lie. I hear this all the time. Once I heard it in Fairfield, CA where the Realtor thought FHA loan limits were only about $200,000 when it turned out they were $565,00 at that time.

Today if you do an FHA loan in San Jose, CA the limits are (updated 10-27-23)

                                                                                          SFR         Duplex     3 units     4 units

SAN JOSE-SUNNYVALE-SANTA CLARA, CA 41940   SANTA CLARA 085 CA $1,089,300 $1,394,775 $1,685,850 $2,095,200

What does this mean ? Simply stated you can purchase a home that might cost a million dollars, and when you apply your 3.5% down payment you fall into the FHA guideline. There are still allot of homes in San Jose, or in Santa  Clara County that fall into this price range. This program is still one of the lowest down payments in the industry... VA is 100% loan to value but I don't believe they go to the same loan amounts as FHA.

So you want to add an ADU - 2 units up to $1.39 million. Purchase or refinance.

How about a five unit commercial structure and you want to purchase and renovate it. Well, on the surface it isn't 1-4 units, it is a commercial property. So, what could we do with it?

1. All FHA projects require an owner resident to it is closed to investors.

2. How can we then turn a five unit residential use building which is commercial into an FHA project. Simply by changing your view and thinking out of the box. What is a commercial use that might fit the FHA 203k model. 

My first thought is that a building with 3 residential units and a commercial unit would likely fit the same zoning. It is called a "mixed-use" building. So, that would be the plan since it doesn't matter what the property is to begin, it is all about what it is after the renovation. Think out of the box is easy if you let your mind work as intended. No boundaries. 

3. Contact us if you need assistance planning your next move. Remember that the maximum loan amount for FHA may be $1,867,275 for four units, should put you in the game in a major way.

4. You can also take a free standing commercial buildsing and add up to 3 residential units under this program. 





downtown 7/8/2023

Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

To learn more about the FHA 203k loan program go to www.203kOnLine.comWhat is your fee? 

Got a 203k project giving you "fits" contact If you are looking for quality 203k software for consultants to speed up the underwriting process..

877-207-6565  state your name when asked please, it is dialing me at the same time.

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Comments (1)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Mike Young there are a lot of misconceptions about FHA loans, and many Realtors try to steer the Sellers and Buyers away from them.

Aug 20, 2022 03:30 PM
Mike Young

I'm afraid you are correct. But typically anyone who stears them away from a renovation loan just doesn't understand them. They clearly havea  time and place. Thanks for dropping by.

Aug 22, 2022 04:58 PM