Blog Layout

Should You Get a Cosigner for Your Mortgage? A Must-Read Guide

Jennifer Hernandez • January 15, 2024

If you're pursuing homeownership but encountering financial hurdles along the way, the idea of having a cosigner for your mortgage might have crossed your mind.


So, why would you consider having a cosigner? The primary reason often revolves around income. If your income alone doesn't quite satisfy the lender's requirements for the debt to income ratio, a cosigner can help bridge that gap. For instance, if you're a recent graduate with a limited income, having a family member or a close relation as a cosigner can significantly boost your chances of realizing your homeownership dream.


However, it's important to recognize that having a cosigner isn't a magical solution. They aren't just there to lend their name and vanish into the background. They have responsibilities too, including handling paperwork and undergoing the same financial scrutiny as you. Crucially, having a cosigner will still require ALL borrowers, including yourself, to have satisfactory credit. Lenders always consider the lowest credit score among all borrowers, meaning if your credit isn't in stellar shape, it could still pose challenges.


In this guide, we're here to debunk common misconceptions about cosigners, particularly the belief that they can miraculously erase or overlook bad credit. That's simply not the case.

Cosigner or Co-Borrower? There is a Difference

Now, let's delve a bit deeper into understanding what a cosigner is, ensuring we keep it clear and straightforward. So, what exactly is a cosigner, and how do they fit into your journey towards securing a mortgage?


The first crucial thing to understand, is that having a cosigner or co-borrower, the lender will have requirements that differ, depending on the loan type you are seeking. If your loan is an FHA loan, secured by the Housing Urban Development of the government, the requirements for a cosigner and co-borrower are more stringent. In fact, they must be an extremely close family member like a sibling, parent, step parent, or aunt or uncle. This is defined as a close family relation.  The other type of common loan, Conventional, is more lenient in this aspect, so be sure to speak directly with a lender about the program you qualify for.  If you are seeking a VA loan, which is a benefit for our veterans, there are no co-borrowers allowed other than the legal spouse.


A cosigner is signing only. They will provide income, asset and credit information, but will only appear on the mortgage note, not the title of the home itself. On the other hand, a co-borrower, is a borrower in entirety, and will also appear on the title of the home with the primary applicant.


These definitions are important as your support network decides how they would like to assist you. Many cosigners and/or co-borrowers will be concerned about their future qualification for a home of their own, if they co-borrower. My suggestion here is that they discuss thoroughly with your lender their finances, and potential future buying plans to be sure to have all of the facts straight before they commit.

Reasons to Consider a Cosigner

Now that we've covered what a cosigner is, let's dig into why having one could be a smart move. The most common reason people turn to cosigners is to boost their income. If your paycheck alone doesn't quite stack up to the lender's requirements for the dream mortgage you have in mind, a cosigner can come to the rescue.


Think about it this way: imagine you've just graduated from college, and you're all fired up to buy your first home. But there's a catch—your income is on the lower side, which might not align with what the lenders are looking for. It's a bit like having all the keys to your new home but missing the right one to unlock the door.


This is where a cosigner can step in and make a real difference. They bring their income and financial stability to the table, bolstering your chances of getting approved for the mortgage you need.


So, having a cosigner isn't just about having a safety net; it's a strategic move that can bridge the gap between your reality of homeownership and the reality of your current financial situation. In the next sections, we'll explore the roles and responsibilities of a cosigner and address some common myths about their impact on your mortgage journey.

The Role of a Cosigner

Now that you know why someone might become your cosigner, it's time to understand that they're not just there to nod silently in your mortgage journey. They take on specific responsibilities, which includes dealing with paperwork and having their financial situation carefully examined.


When you team up with a cosigner to apply for a mortgage, their financial background is put through the same thorough evaluation as yours. They should expect to provide pay stubs , bank statements and possibly other documents


In the next section, we'll tackle common myths about cosigners to ensure you have a crystal-clear understanding of their role in your mortgage journey.

Common Myths About Cosigners

It's time to set the record straight on some misconceptions surrounding cosigners.


Myth #1. Having a cosigner can perform a magical vanishing act on bad credit.

In reality, this is not the case. Lenders play by a different rulebook—they always go with the lowest credit score among everyone involved in the mortgage, regardless of how impressive your cosigner's credit history might be.


Imagine you have a not-so-great credit history, and you're thinking that a cosigner with excellent credit will make all those past financial hiccups disappear. This is actually not the case. All credit is considered, and the lender will consider the lower of the borrower's credit score for the final decision of the approval.  If you need to work on your credit, sooner rather than later is better.  If you are not wanting to talk to a lender yet, but are curious to see the credit score that most resembles what lenders pull, visit MyFICO.com.  Getting your credit score up could save you hundreds of dollars a month on your mortgage payment and thousands over the life of your loan.


The primary role of a cosigner is to boost the income qualifications for your mortgage application. In other words, they can assist you in meeting the financial requirements that might be a bit out of reach on your own.


Myth #2. Cosigners will later not be able to get a home of their own.

True that the loan they cosigned for will be considered when they are later applying for their own credit. However, in many instances, the lender is able to obtain proof that the mortgage is being occupied and paid by you. Most of the time, 12 month proof of your payment will need to be obtained, so be sure to keep good records and pay using a bank account. When cashier checks or money orders are used, this can pose a verification problem later on. In reality, this is not the case. Lenders play by a different rulebook—they always go with the lowest credit score among everyone involved in the mortgage, regardless of how impressive your cosigner's credit history might be.


Myth #3. Cosigners can be anyone.

As mentioned before, this definition of close family relation will differ between an FHA loan, and a Conventional loan. These are the two most popular loan types, but by not means the only ones. Be sure to check with a mortgage lender to discuss your situation, and if your cosigner meets the defined criteria for the program.


Myth #4. Cosigners can sign without their spouses knowing or also signing.

This is a big one. Depending on the state you live in, this answer will be different. In community property states, the cosigners legal spouse will also need to sign at closing. This does not mean they will be on title, but they must acknowledge they know of the transaction. In addition, for some loan types, like FHA, the spouse of the cosigners credit will need to be pulled as well. This is because the income of the cosigner must be able to carry all the debts of their household as well.


Myth #5. If paid late, the cosigners credit will not be affected.

All signers credit will be affected in the case of a 30 day plus late payment. So be sure that you plan to have open communication with them , in case of a hardship down the line. Communicating about things ahead of time will help you preserve the relationship, rather than paying late, and risking damaging relationships later on.


As we approach the final stretch of our exploration into cosigners and mortgage loans, let's wrap it up with some valuable takeaways. When you're considering whether or not to involve a cosigner, take a moment to weigh the pros and cons thoughtfully. Think about your finances and also the finances of your cosigner, your credit situation, and even your relationship with the potential cosigner.


Reaching out to a mortgage loan officer can be a game-changer. Mortgage professionals are experts at helping provide exact answers so that you and your family can decide if a cosigner option is right for you. 


As you move forward in your homeownership journey, take a step back if needed, gather all the facts, and make decisions that are best for you. Homeownership is a significant milestone, and with the right information, you're well on your way to achieving that dream.

Our mortgage team would be honored to provide answers to your questions about cosigners to help decide if this is your path for purchasing a home this year. We can be reached at www.loanwithjen.com/contact

Visual concept of down payment assistance with a stack of $100 bills, a house icon, and a notepad
By Jennifer Hernandez April 14, 2025
Down payment assistance programs (DPAs) sound like a dream come true—free money to help you buy a home! But before you get too excited, there are hidden costs and crucial details you need to be aware of. Let’s uncover the real impact of DPAs so you can decide if they’re the right fit for you. What Are Down Payment Assistance Programs? Down Payment Assistance Programs, or DPAs, are designed to help homebuyers, particularly those with limited income, afford a home. While many of these programs are for first-time buyers, some cater to repeat buyers as well. Here are the key factors to consider: Income Limits: Most DPAs have income restrictions based on your area’s average median income. Credit Score Requirements: Your credit score will need to meet a minimum threshold. Geographic Restrictions: While some programs are available statewide, others are limited to specific locations. Types of Down Payment Assistance Grants – Free money that doesn’t need to be repaid. These are typically reserved for first-time buyers. Forgivable Loans – A second mortgage that is forgiven after you live in the home for a set period (commonly 3, 10, or even 20 years, depending on the program). Deferred Payment Loans – A second lien with no required payments until you sell or refinance your home. This must be repaid when you pay off your first mortgage. Sounds great, right? Well, let’s dive into the hidden costs and fine print you need to be aware of.  The Hidden Costs of Down Payment Assistance 1. Higher Interest Rates Most DPAs come with a higher interest rate compared to conventional financing. This means you could be paying thousands more in interest over the life of your loan. While some programs offer competitive rates, qualifying can be more difficult. 2. Increased Closing Costs In addition to a higher interest rate, many DPAs come with additional fees, such as: State Administration Fees: These can range from $500 to $600. Origination Fees: Some lenders charge a percentage of the loan to access the program. Before committing to a DPA, compare a loan estimate with and without assistance to see the true cost side by side. 3. Restrictions on Occupancy Many DPAs require you to live in the home as your primary residence for a set period. If you decide to rent it out, you could be required to pay back the assistance in full. 4. Income and Location Restrictions Most programs have income caps based on your area’s median income. If your income exceeds the limit, you won’t qualify. Some programs also require you to buy in specific areas. 5. Recapture Tax (Resale Requirements) Some programs include a recapture tax , meaning if you sell your home for a profit, the program can claim a portion of that profit as repayment for the assistance. This can be a significant financial setback if you weren’t expecting it.
Illustration of a no-down-payment mortgage concept, with a house and a crossed-out money bag symbol
By Jennifer Hernandez April 8, 2025
Dreaming of owning a home but haven’t saved up for a down payment? You’re not alone—and good news: there are options for you! In this post, we’ll break down four powerful ways to buy a home with little or no money down —plus, a few key mistakes to avoid that could cost you thousands. These are real strategies we use with buyers every single month. 1. USDA Loans – For Rural Buyers The USDA loan program, which is backed by the United States Department of Agriculture , offers 0% down financing for eligible properties and borrowers. The catch? There are income and geographic restrictions . Good for : Rural or suburban buyers outside city limits Down payment : $0 Bonus : Lower mortgage insurance than FHA  Check if a property qualifies for USDA Watch this video : Understanding USDA Loans with Jen 2. VA Loans – For Veterans and Their Families If you’re a veteran or the surviving spouse of a veteran, the VA loan offers a $0 down path to homeownership—with no mortgage insurance and loans available up to $2 million ! Good for : Active military, veterans, or qualified spouses Down payment : $0 Bonus : Flexible credit guidelines and competitive rates Watch this video : How VA Loans Work 3. Down Payment Assistance (DPA) If USDA or VA don’t fit your situation, down payment assistance programs (DPAs) might be your best option. These programs are provided at the state, county, or city level , and they can cover some or all of your down payment and/or closing costs. Good for : First-time and repeat buyers with limited savings Down payment : Partial or full assistance Bonus : Can sometimes be combined with seller credits Texas buyers, check out: 🔗 My First Texas Home Program 🔗 Texa s State Affordable Housing Corporation (TSAHC) Video breakdown : Down Payment Assistance Explained 4. Gift Funds – From Family or Close Friends Did you know you can receive money as a gift to help with your down payment? That’s right. FHA, VA, USDA, and Conventional loans all allow gift funds on primary residence purchases. But before you make a huge cash deposit, make sure you talk with your lender about how to document the gift. Good for : Buyers with supportive family Down payment : Fully or partially covered by gifts Note : Must be properly documented with a gift letter and proof of transfer Learn more : How to Use Gift Funds
Smiling woman using a credit card and smartphone, highlighting the importance of credit education.
By Jennifer Hernandez March 31, 2025
Your credit score is the key to unlocking your financial future. Understanding how it’s calculated can help you make better financial decisions and avoid costly mistakes. Many people find their credit score to be a mystery—sometimes it drops even when they make payments on time! If you've ever been frustrated by fluctuations in your score, this guide will break down the five key components of your credit score so you can take control and boost it effectively. Why Your Credit Score Matters Your credit score is a three-digit number that reflects your financial responsibility to creditors. It affects everything from securing a mortgage or auto loan to getting approved for credit cards and even determining your interest rates. The better your score, the more favorable your loan terms— lower interest rates, smaller deposits, and better financial opportunities . In fact, 90% of lenders use FICO scores as their primary credit evaluation tool ( source ). But how exactly is your FICO score calculated? Let’s break it down. The 5 Components of Your Credit Score 1. Payment History (35%) – Never Pay Late! Your payment history is the most important factor in your credit score. It includes: On-time vs. late payments (payments that are 30+ days late are reported to credit bureaus) Collections and charge-offs Bankruptcies or foreclosures 🔹 Pro Tip : Always pay at least the minimum payment by the due date. Setting up auto-pay can help prevent accidental late payments. If you’re struggling, reach out to creditors to discuss payment plans before you fall behind. 📌 More on improving your payment history: How Late Payments Affect Your Credit Score 2. Credit Utilization (35%) – Keep Your Balances Low Your credit utilization ratio refers to the percentage of available credit you’re using. High utilization can hurt your score, even if you pay your balance in full each month! 🔹 Best Practice : Keep your credit card balances between 10-30% of your credit limit. For example, if you have a $5,000 limit, don’t carry a balance higher than $1,500 at any time. 🔹 Secret Tip : Your balance is reported to the credit bureaus on your statement closing date , NOT when you make a payment. If you pay your credit card bill before the statement closing date, you can lower the reported balance and improve your utilization ratio. 📌 More on credit utilization: Mastering Your Credit Score 3. Length of Credit History (15%) – The Longer, the Better Credit bureaus consider how long your accounts have been open. Older accounts demonstrate stability and reliability . 🔹 Best Practice : Avoid closing old credit accounts, even if you don’t use them often. Keeping them open helps maintain your average account age . 📌 More on the importance of credit history: How are Credit Scores Made? 4. New Credit & Inquiries (10%) – Be Careful with Hard Pulls Every time you apply for credit, a hard inquiry is recorded on your report, which can slightly lower your score. Applying for multiple credit accounts in a short time signals to lenders that you may be in financial trouble. 🔹 Best Practice : Keep new credit applications to a minimum and only apply when necessary. 🔹 Good to Know : Soft inquiries (like checking your credit score on your own) do not affect your credit score! 📌 More on credit inquiries: Does a Hard Enquiry Damage My Credit Score? 5. Credit Mix (10%) – Variety Matters  Having a healthy mix of credit types boosts your score. Lenders like to see that you can manage different types of credit responsibly . A strong credit mix includes: Installment loans (e.g., mortgages, auto loans, student loans) Revolving credit (e.g., credit cards, home equity lines of credit) 🔹 Best Practice : If you only have one type of credit, consider adding another responsibly (e.g., opening a credit card if you only have loans). 📌 More on credit mix: How Your Credit Mix Affects Your Score
Person filling out a form with a focus on understanding hard inquiries on a credit report.
By Jennifer Hernandez March 24, 2025
Does a Hard Inquiry on Your Credit Really Hurt Your Score? If you're planning to buy a home in Texas, you may be wondering: Does a hard inquiry on your credit really damage your score, and how will it affect your chances of mortgage approval? Let's break down what a hard inquiry is, how it impacts your credit, and strategies to minimize its effect so you can confidently move forward with your home purchase. What is a Hard Inquiry? A hard inquiry occurs when a lender checks your credit report to assess your creditworthiness for a loan, credit card, auto loan, or mortgage. Unlike soft inquiries (which happen when you check your own credit or when a lender pre-qualifies you without a formal application), hard inquiries are recorded on your credit report and may impact your credit score. Inquiries remain on your credit report for up to two years , but the good news is that FICO scoring models (used by 90% of lenders) only consider them for one year. This means that while the inquiry stays visible on your report, its impact on your score diminishes after 12 months. How Hard Inquiries Affect Your Mortgage Approval  A hard inquiry alone is unlikely to prevent you from getting pre-approved for a mortgage. However, here’s what you need to know: FICO Treats Multiple Mortgage Inquiries as One: If multiple mortgage lenders pull your credit within a 30-day window , it only counts as one inquiry for scoring purposes. This allows you to shop for the best mortgage rates without penalty. Other Inquiries Can Hurt Your Score: While mortgage inquiries are grouped together, applying for credit cards, auto loans, or personal loans during the same time frame can lower your score. Impact Depends on Your Existing Credit Score: If your credit is already strong (e.g., 700+ score ), a hard inquiry may have a minimal effect—think of it as a small “peck” on a steel building. However, if your credit is already struggling, an additional inquiry could have a more noticeable impact. 👉 For a deeper dive into credit scores and mortgages, check out Loan with Jen’s guide on mortgage pre-approvals .
Concerned man reviewing a collections notice on his credit report while on the phone.
By Jennifer Hernandez March 20, 2025
Did you know that paying off a collection won’t help your credit score unless it gets deleted ? That’s right! Collections don’t automatically disappear from your credit report, even if you’ve settled the debt. If you’re planning to buy a house or improve your credit, removing collections can be a game-changer. In this guide, I’ll walk you through six proven steps to delete collections from your credit report forever , plus a bonus hack that might speed up the process. Follow these steps carefully, and you could see your credit score improve significantly! Why Collections Hurt Your Credit Score A single collection—whether it’s $10 or $5,000 —can drop your credit score by 100 points or more overnight. Your credit score affects more than just home loans. It impacts: Your ability to qualify for a mortgage Your interest rates on car loans and credit cards The deposit amount for utilities like electricity and internet Having a collection on your report can cost you thousands of dollars in extra interest over time. That’s why it’s crucial to remove them the right way . Step 1: Get Your Full Credit Report Before you start, you need to know exactly which collections are reporting and to which credit bureaus . Where to pull your credit report: AnnualCreditReport.com (Free once per year) MyFICO.com (Paid but gives accurate FICO scores, which mortgage lenders use) Pro Tip: Make sure you get reports from all three bureaus ( Experian, TransUnion, and Equifax ) since not all creditors report to every bureau. Step 2: Identify the Collections & Calculate Your Offer Once you have your report, write down all open collections (not charge-offs). Keep track of: Collection company name Amount owed Contact phone number Now, add up the total amount owed and calculate 50% of that number . This will help you negotiate later. For example: If your collections total $2,000 , set aside $1,000 for settlements. Having funds ready before negotiating gives you leverage to settle immediately when the time comes. Step 3: Research the Collection Agency Not all collection agencies have the same policies. Look up the collection company online to see if they offer Pay-for-Delete (PFD) agreements. This means they will remove the collection once you pay . If the company is PFD-friendly, mark them as a priority! Step 4: Call the Collection Agency & Negotiate This is where your sweet voice comes in! Be polite, professional, and never argue . Follow these steps: Call the collection agency directly (no emails or texts!). Ask for a settlement : Start by offering 20-25% of the balance. Negotiate : If they counteroffer, work towards 50% or less . Ask for Pay-for-Delete : Say, "If I settle today, will you delete this from all three bureaus?" Get it in writing : Before paying, request a written agreement confirming deletion . If they refuse Pay-for-Delete , do not pay . Keep calling back until you get an agent who will agree. Step 5: Make Your Payment & Track It  Once you receive a written confirmation , pay the settlement amount using a traceable method like: Credit/debit card Online payment portal (if available) Check or money order (with proof of payment) After paying, follow up with the collection agency to confirm when they will notify the credit bureaus. Most agencies report once per month , so expect deletion to take 30-90 days .
Businessman pushing credit score meter from poor to excellent.
By Jennifer Hernandez March 3, 2025
This information could save you thousands of dollars. Not all credit scores are FICO scores, and to complicate things even further, there are over three dozen versions of FICO ! If you’re planning to buy a home soon and are concerned about your credit score, keep reading—I’m breaking down the real facts. No fluff, just the essential details you need to know. The Credit Score Surprise As a mortgage loan officer with nearly three decades of experience , I’ve seen it all. Every week, I ask new clients what they think their credit score is. Without fail, the number they provide is different from the actual score I pull. Sometimes it’s just a few points off, but I’ve also seen differences of 100 points or more ! Why does this happen? Credit scores are highly individualized, and not all scores are calculated the same way. Here’s the good news—I’ve been pulling credit reports since mortgage companies began using FICO scores. I’ve learned how to navigate this complicated world, and I’m here to share what you need to know. What Is a FICO Score?
Checking FICO score on a smartphone, showing credit factors like payment history and usage.
By Jennifer Hernandez February 27, 2025
If you’re planning to buy a home in the next 12 months, understanding your credit score is essential. Not all lenders use the same credit scoring system, and the score you see from your credit card company may differ significantly from what mortgage lenders use. About 90% of lenders rely on FICO scores , but what exactly is FICO, and why is it so important? In this post, we’ll take a journey through the history of FICO and credit reporting, explain why not all credit scores are created equal, and give you practical tips to improve your credit score for home buying success. What Is FICO, and How Did It Start? To understand FICO, we need to take a step back into history. FICO (Fair Isaac Corporation) wasn’t always the gold standard for credit scoring. Its roots go back to 1956 as a data analytics company that specialized in building algorithms for various industries. But credit reporting actually started before FICO got involved, it began much earlier—back in the 1800s . The Birth of Business Credit Reporting In 1841 , a company called The Mercantile Agency began collecting and recording data on businesses, providing valuable information to creditors. This company later rebranded as Dun & Bradstreet , which remains a major player in business credit reporting today. While businesses were being tracked and scored, there was no system in place for consumer credit. That changed in the early 1900s . The Evolution of Consumer Credit Reporting In Atlanta, The Retail Credit Company (RCC) emerged in the early 1900s, collecting extensive data on individual consumers. Unfortunately, they went too far—gathering private personal information, including political affiliations and even racial and sexual details. The U.S. government stepped in to regulate this overreach by enacting the Fair Credit Reporting Act (FCRA) in 1970 , which established rules on how consumer credit information could be collected and shared. Feeling the heat from the new regulations, RCC rebranded as Equifax , one of the three major credit bureaus we recognize today, along with TransUnion and Experian . By the late 1980s , these agencies were struggling to make sense of the growing mountain of credit data. They needed a standardized system to interpret creditworthiness—so they partnered with FICO . How FICO Became the Standard for Credit Scoring In 1989 , FICO introduced its credit scoring system, which quickly became the industry standard for evaluating credit risk. FICO’s algorithm turned complex credit data into a simple three-digit score, making it easier for lenders to assess borrowers' trustworthiness when it came to paying back debt. Today, FICO is used by about 90% of lenders , although there are dozens of FICO models , each tailored to different types of lending (e.g., auto loans, credit cards, and mortgages). Why Your FICO Score May Vary  If you’ve ever checked your credit score online and then applied for a mortgage, you might have noticed a significant difference between the two numbers. That’s because not all credit scores are created equal. There are more than three dozen versions of FICO , and each one serves a different purpose. For example: FICO Auto Score is used by auto lenders to determine your car loan eligibility. FICO Bankcard Score is used by credit card companies. FICO Mortgage Score is used specifically by mortgage lenders. Each version uses a slightly different algorithm to weigh factors like payment history, credit utilization, and length of credit history. Mortgage lenders typically use the most recent version of FICO, which can result in a lower score compared to what you see on consumer credit apps. Getting the new FICO scoring into a company’s system is costly, so when you are getting a free credit report, you are most certainly not getting the most up-to-date and accurate credit score. Companies just can’t afford to give the score away for free.
Person pulling a needle on a credit score gauge toward the green zone, symbolizing improving credit
By Jennifer Hernandez February 17, 2025
If you’re planning to buy a home, one of the most important questions on your mind is probably: What credit score do I need to qualify for a mortgage? I’m here to save you hours of research and give you the real facts that matter most. We’ll cover the minimum credit score requirements for various loan types, from conventional to FHA, VA, USDA, and portfolio loans. Plus, read to the end for a bonus tip on how to boost your credit score by 40 to 50 points—fast! Understanding Credit Scores for Mortgages  Not all credit scores are created equal. While you may see one score when checking your credit card or car loan, the FICO score used for mortgages could be different. There are over three dozen FICO models, but 90% of lenders rely on one specific version for mortgages. 💡 Pro Tip: The best way to know your mortgage FICO score is to check with a licensed mortgage lender. Minimum Credit Score Requirements by Loan Type
FHA home loan concept with cash and a calculator in the background
By Jennifer Hernandez February 12, 2025
Are you exploring loan options and wondering if an FHA loan might be right for you? If you need leniency on credit, higher debt-to-income ratios, or have faced past credit challenges like bankruptcy or foreclosure, an FHA loan could be the key to achieving your homeownership dreams. Let’s unpack the details of FHA loans, including the latest 2025 updates, their unique benefits, and factors to consider. What Is an FHA Loan? FHA stands for the Federal Housing Administration, a government-backed entity that has been making homeownership more accessible since 1934. During its inception, only 1 in 10 people were homeowners. Today, that number has risen to 6 in 10, thanks in part to initiatives like FHA loans. FHA loans are designed to help borrowers with less-than-perfect credit or other financial challenges qualify for home financing. Every year, FHA adjusts its loan limits based on home value trends, providing a flexible and accessible option for buyers nationwide. FHA Loan Limits for 2025  In 2025, FHA loan limits have increased by approximately 5-6%, reflecting rising home prices across the country. For a one-unit property, the baseline limit is $524,225. However, limits can go much higher in high-cost areas like California, New York, and New Jersey. In these regions, FHA loans can reach up to $1,209,000 for a one-unit property. If you’re curious about the FHA loan limit in your county, use this handy lookup tool . FHA also allows financing for two, three, or four-unit properties with higher limits. This makes it a versatile choice for those interested in multi-family homes.
More Posts
Share by: