Looking to buy a home in Travis County, Texas in 2022? If so, you'll be happy to know that the FHA loan limits have been increased for this year! This means that you'll be able to borrow more money to purchase your dream home while taking advantage of FHA-backed mortgages in this area.
If you are thinking about buying a home in Travis County, it is important to understand what the FHA loan limits are so that you can budget accordingly. In this blog post, we will discuss the FHA loan limits for Travis County and nearby areas and how they may impact your homebuying process.
What is an FHA loan?
An FHA loan is a mortgage that is insured by the Federal Housing Administration (FHA). This means that if you default on your loan, the FHA will reimburse your lender for any losses that they may incur.
FHA loans were established to help lower-income Americans purchase homes. Thus they are popular among first-time homebuyers because they offer lower down payments and mortgage rates than traditional mortgages.
To be eligible for an FHA loan, you must meet certain requirements, which vary depending on the state in which you live. In Texas, borrowers must have a credit score of at least 580 to qualify for an FHA loan.
2022 FHA programs & rates
Just because the FHA loan limits have increased for Travis County in 2022 doesn't mean that all FHA programs and rates will be changing. In fact, most FHA programs and rates will remain the same from 2021 to 2022. However, there are a few changes that you should be aware of.
For example, lending requirements are tighter this year. The FHA does not provide loans itself - you still have to go to a lender. And lenders may require anywhere from 3.5% to 10% down on an FHA loan.
In the past two years, in light of the pandemic, lenders saw homeowners with FHA loans were the ones disproportionately impacted. Thus, the FHA lending market has become much more competitive in 2022.
So while FHA regulations haven’t changed, the lenders who actually provide the loans may have more stringent requirements. Therefore, it is of the utmost importance to work with a credible, experienced lender to ensure a smooth loan process and a fair interest rate.
FHA loan vs conventional loan
There are several key differences between FHA and conventional loans. Understanding these differences can help you make the right choice for your home-buying experience.
Firstly, FHA loans require lower down payments than traditional mortgages. FHA loans also come with a variety of mortgage insurance premiums, which can be expensive in the long run.
Lastly, FHA loans are available to borrowers with credit scores as low as 580, while most conventional mortgages require a score of at least 640.
How can I get an FHA loan in Texas?
To qualify for an FHA loan in Texas, you'll need to meet the specific requirements. While FHA requirements are set by the federal government, each state can enact additional regulations, and beyond that, individual lenders can add rules, as well.
To get an FHA loan in Texas in 2022 you need to meet these basic requirements:
- Have a credit score of at least 580 (or above)
- Have at least three years of verifiable employment history
- Be able to provide proof of income
- Meet the debt-to-income ratio requirements (no higher than 57%)
If you meet these qualifications, you'll likely be approved for an FHA loan in Texas. Keep in mind that each lender may have its own additional requirements, so it is important to speak with an FHA lender directly to find out what you need to do to qualify.
How to purchase a home in Travis County
Once you've determined that you meet the FHA loan limits for Travis County and are eligible for an FHA loan, it's time to start the homebuying process! This can be a lengthy process, but it will be worth it when you finally get the keys to your new home.
Here are some tips on how to purchase a home in Travis County:
- Work with a local real estate agent and mortgage lender who know the market well.
- Get pre-approved for a mortgage (here’s where a great mortgage lender comes in handy!) so that you know how much money you can borrow.
- Research different neighborhoods in Travis County that fit your budget and lifestyle.
- Attend open houses and tour homes to get a better idea of what you want.
- Make an offer on the home that you want and be prepared to negotiate.
- Consider the possibility of a bidding war or dropping contingencies. The housing market is competitive, so if you set boundaries for yourself ahead of time, you won’t make an emotional decision in the heat of the moment that you regret later.
Local loan limits — Travis County, Texas
It's important to note that the FHA loan limits vary depending on the specific county where you are buying a home. For example, the FHA loan limit in Travis County is $483,000.
Nationally, the FHA’s 2022 minimum limit “floor” of $420,680 is set at 65 percent of the national conforming loan limit. That means that if you qualify, you can use an FHA loan in Texas to buy a house that costs up to $420,680 throughout most of the state.
This FHA “floor” applies to those areas where 115 percent of the median home price is less than the “floor” limit. However, any area where the loan limit exceeds this “floor” is considered a high-cost area, such as the Bay Area in California or the Austin area in Texas.
The FHA has set its maximum loan limit “ceiling” for high-cost areas as high as $970,800, which is 150 percent of the national conforming loan limit. This is an increase of over 18 percent from 2021! In Texas, the highest loan limit for a single-family home is $483,000.
Lending limits for FHA loans in Texas counties
In addition to the FHA loan limits for Travis County, there are also different lending limits for FHA loans in other Texas counties. These lending limits vary depending on the county's population size and median housing prices.
For example, in Harris County (which is Houston's county), the FHA loan limit is $362,790 for a single-family home - the same as in Travis County. Meanwhile, the FHA loan limit in Williamson County (located south of Austin) is higher, at $379,500.
However, in Caldwell and Bastrop Counties (which are located near Austin), the FHA loan limit is more than $100,000 higher, at $483,000.
So be sure to check with your local FHA lender to find out what the FHA loan limit is for any specific county you’re interested in. Across a big state like Texas, the amounts can vary significantly!
Travis County housing market
The housing market in Travis County has been red hot in 2022, like much of Texas. In fact, as of February 2022, Travis County home prices were up 13.6% compared to last year. Situated just north of San Antonio and Houston, Travis County has seen an uptick in interested buyers.
Homes in this county are selling for a median price of about $540,000. That’s not to say that you can’t find something more affordable, but it’s helpful to understand market averages while house hunting.
However, one change is that homes in Travis County aren’t selling quite as quickly as previously. That may be a good thing for potential homebuyers! On average, homes in Travis County are selling after 34 days on the market, versus 32 days last year.
Comparing housing markets in Travis County, San Antonio, & Houston
In comparison to Travis County, Houston and San Antonio also have robust housing markets with some more affordable options. If you have flexibility, you can always broaden your housing search to include neighboring metropolitan areas.
For example, in San Antonio homes are selling for less -about $268,000 on average- but very quickly. On average, homes in San Antonio are selling after just 25 days on the market.
Meanwhile, Houston homes are selling for a median price of $313,000, which is the largest year-over-year jump (about 16.5%) over the other two areas.
FHA lenders in Texas
If you're looking for a list of FHA lenders in Texas, we have you covered! The experienced team at Texas United Mortgage can help you purchase the home of your dreams. We bring local expertise to this sometimes wild housing market.
When you’re looking for a Travis County mortgage lender, you want to know that your team understands every nuance to get you the best deal. That’s us!
The bottom line on Travis County FHA loan limits in 2022
The FHA loan limits for Travis County have increased for the year 2022. And this means that now more than ever may be the perfect time for you to find and purchase a home in this area.
Ready to get started and see what you qualify for? Reach out to us directly to find out what you need to do to qualify and what amount you will be pre-approved for. Happy house hunting!