Maximum Term Length for an FHA Loan Is 30 Years, Handbook Says

According to current guidelines established by the Department of Housing and Urban Development, the maximum repayment term for an FHA-insured mortgage loan is 30 years. But what does that mean exactly? Here’s an explanation of the mortgage repayment term length for FHA loans, as it applies to you as a borrower.

Maximum Repayment Term (Length) for FHA Loans

Definition let’s start with some basic definitions.

Term — A mortgage term is basically the duration of the home loan. This is the repayment window, or timeframe, during which the borrower makes monthly payments to repay the debt. For example, a 30-year mortgage loan has a repayment term length of 30 years. At the end of that period the loan will typically be paid off entirely (though many homeowners sell or refinance their homes long before the term expires).

FHA — An FHA loan is a type of mortgage loan that is insured by the government, via the Federal Housing Administration. This agency is part of HUD. Mortgage lenders that participate in this program receive government insurance that gives them some degree of protection from borrower default, or failure to repay.

Mortgage loans can have different terms, or repayment periods. Two of the most common example are the 15-year and 30-year mortgages. When it comes to FHA-insured mortgage loans, the maximum repayment term is generally 30 years.

What the Official Guidelines Say About It

For quality assurance purposes, we looked this up in the Single-Family Housing Policy Handbook, also known as HUD Handbook 4000.1. This is the official handbook that establishes guidelines and criteria for the FHA loan program.

  • On page 161 of this publication, we find the following quote: “the maximum mortgage term may not exceed 30 years from the date that amortization begins. FHA does not require that mortgage terms be in five-year multiples.”
  • On page 429 of the HUD handbook, it talks about the maximum repayment term for FHA loans with an adjustable-rate mortgage, or ARM: “the ARM must be fully amortizing over a period of no more than 30 years.”

Both of these quotes talk about amortization. This is a big word that basically refers to the gradual reduction of a loan balance over time, when regular monthly payments are made. Amortization occurs during the repayment term, which is limited to a maximum of 30 years in the case of FHA home loans.

Conventional loans (those that are not insured by the federal government) might have terms that exceed 30 years. Conventional mortgage products are originated, and sometimes insured, solely within the private sector and with no government backing. So there is more flexibility, when it comes to setting the term and other parameters of the loan.

But for an FHA loan, the maximum repayment term is 30 years in most cases.

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This website offers a wealth of information relating to the FHA mortgage insurance program. Every week, we publish new articles to help home buyers and mortgage shoppers understand how this program works.

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Important disclaimers and notes: This article explains the maximum repayment term for an FHA home loan. The information above was adapted from HUD Handbook 4000.1. We strive to be as accurate as possible when publishing information onto this website. But there’s always a chance for human error, misinterpretation, etc. As a result, we refer you to the Department of Housing and Urban Development as the official source for FHA loan information. If you have questions about this program, you might want to schedule a session with a HUD-approved housing counselor.