The table below shows the California FHA loan limits for 2021, by county. Federal housing officials have increased these limits over the previous year, in response to rising home values in the U.S.
Note: The table below only shows single-family properties (i.e., those purchased during a typical home-buying scenario). For a complete list of loan limits across all property types, you can view or download the PDF document below.
2021 FHA Loan Limits for California
The table below shows the 2021 FHA loan limits for single-family purchase loans in all California counties, alphabetized by county name.
|County||One-Family FHA Loan Limit|
|SAN LUIS OBISPO||$701,500|
Disclaimer: This table was adapted from one created by the Department of Housing and Urban Development. We have made every effort to ensure the accuracy of this data. But there’s always a chance for human error. If you spot any errors or inaccuracies on this page, please send an email to email@example.com.
Another Year, Another Increase
In December of 2020, Federal Housing Administration officials announced they would be increasing California FHA loan limits for 2021. This change was made in direct response to home-price gains that occurred during 2020.
The 2021 limits were increased for most counties across the state, with only a few exceptions. In California, the FHA loan limits went up for all counties except Alpine, Calaveras, Inyo and Mono. These four counties have lower home prices, when compared to most others across the state. So there was no justification for higher loan limits.
But in all other California counties, the 2021 FHA loan limits went up from the previous year’s caps.
As usual, the highest “ceiling” for FHA loan limits has been assigned to several counties that fall within the San Francisco Bay Area, as well as the Los Angeles metro area.
Six of the nine Bay Area counties will have the maximum limit for 2021. These include Alameda, Contra Costa, Marin, Santa Clara, San Francisco and San Mateo. The other three counties within the Bay Area — Napa, Solano and Sonoma — have slightly lower FHA loan limits for 2021. This is due to regional variations in home values.
Frequently Asked Questions
The FHA loan program is a popular mortgage financing options among home buyers in California. This program offers a low down payment of 3.5%, which appeals to buyers who have limited funds in the bank.
It’s also a fairly flexible program, in terms of borrower requirements and criteria. That’s because the lenders who offer these loans receive insurance protection from the federal government.
Here are some common questions about California FHA loan limits.
Why does FHA impose loan limits on borrowers?
Federal law requires the FHA to set limits on the home loans they insure. The National Housing Act — which was amended by the Housing and Economic Recovery Act of 2008 (HERA) — requires the federal housing agency to establish single-family purchase loan limits at 115% of local median home values.
This mortgage program was originally designed to support home buyers and borrowers who have a low to moderate income for their county. It is not intended for wealthy borrowers who want to buy a high-end luxury property that far exceeds the median home value.
This doesn’t mean you have to be a “low-income” borrower, in order to qualify for the FHA program. It just means there are specific size limits to how much you can borrow, due to the program’s original purpose and mandate.
Why do they vary by county?
FHA loan limits are actually based on the “conforming loan limits” established by the Federal Housing Finance Agency (not to be confused with the FHA). The conforming caps are used for “regular” mortgage loans that are not insured by the government. The FHA limits are created by using a percentage of those conforming caps.
Here’s how the Department of Housing and Urban Development (HUD) explains it on their website:
“The National Housing Act, as amended by HERA, requires FHA to establish its floor and ceiling loan limits based on the loan limit set by FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac.”
To put it simply: All loan limits are based on median home values. As you know, home prices can vary widely from one county and region to the next. So the FHA limits can vary as well. More expensive real estate markets tend to have higher caps, while more affordable markets have lower ones.
For example, you’ll notice a big difference in the 2021 FHA loan limit for San Francisco County, versus counties like Butte and Fresno. The San Francisco area is one of California’s most expensive markets, while Butte and Fresno are much more affordable by comparison.
This is why the 2021 California FHA loan limits vary from one county to the next.
Generally speaking, the limits are the same for an entire metro area. For instance, you’ll notice that the maximum loan size is the same for El Dorado, Placer, Sacramento and Yolo counties, because they are all part of the Sacramento-Roseville-Folsom metropolitan area.
What if I need to borrow more than the limit?
California FHA loan limits represent the maximum amount a person can borrow, when using this particular program. But there are other mortgage options available, as well.
If you need to borrow an amount that’s higher than the 2021 California FHA loan limit for the county where the home is located, you could use a “conventional” mortgage product. By definition, a conventional loan is one that is not insured by the federal government. Thus, they can be much bigger than the FHA caps shown above.