- FHA loans help homebuyers purchase modest homes across every county in the U.S.
- Nearly every county in Minnesota and Wisconsin will see an increase for FHA loan limits in 2017
- When FHA loan limits rise, your buying power may increase as well
FHA loans, which are backed by the Federal Housing Administration, are meant to assist homebuyers seeking modest homes in any county across the U.S. These "helper loans" allow for homebuyers to secure a loan with a down payment as little as 3.5 percent.
Because they are not meant to assist homebuyers with a luxury property purchase, FHA loans have loan limits based on the county's median home price and other economic factors. In 2017, the FHA announced they will increase loan limits in most counties across Minnesota and Wisconsin. Here are insights you can use to determine if FHA's loan limit increases will affect your buying power.
2017 FHA loan limits for Minnesota and Wisconsin
Beginning in 2017, the FHA loan limit for a single-family home will rise for all but one Minnesota county.
- $332,350 is the new limit for metro counties including Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Le Sueur, Mille Lacs, Ramsey, Scott, Sherburne, Sibley, Washington and Wright.
- Cook County's limit will remain the same, at $282,900.
- The FHA loan limit for all other non-metro Minnesota counties will rise to $275,665.
In Wisconsin, the 2017 FHA loan limit for a single-family home varies a bit more.
- In Kenosha County, the limit is unchanged, at $365,700.
- In Pierce and St. Croix counties, the 2017 FHA loan limit is rising to $332,500.
- In Milwaukee, Ozaukee, Washington and Waukesha counties, the FHA loan limit for 2017 is $299,000, an increase of more than $10,000 over 2016.
- Columbia, Dane, Green and Iowa counties will see a loan limit of $286,350; this is an increase of nearly $15,000 over their 2016 loan limit.
- The FHA loan limit for all other Wisconsin counties is rising to $275,665.
The FHA loan limit is for the total amount of the loan, not the total price of the home. When searching for homes online, calculate in your down payment savings before you set your search parameters.
For example, if you have your eye on a $335,000 new construction home in New Prague, and you have 6 percent saved for a down payment ($16,750), you could still apply for an FHA loan. The loan amount would be $318,250 – well within the loan limit of $332,500 for Le Sueur County.
Down payment minimums
If the down payment is your pain point, keep in mind that it's now possible to secure an FHA loan with as little as 3.5 percent down, provided you have good credit and a stable earned income history.
This means that if you're looking at $130,000 home in greater Minnesota, you would need a minimum down payment of $4,550 to secure a loan. If you're looking at a more expensive $240,000 home in Cook County, you would need at least $8,400 for a down payment.
Where do you stand?
Remember that every mortgage variable — from interest rates to loan limits — are hypothetical until you work with a mortgage loan officer to analyze your personal financial situation. Get started with a loan expert to see how much you can afford in today's market.
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