Requirements & Limits for 2023 by County
If the idea of buying a property with only 3.5 percent for a down payment is appealing, an FHA loan could be for you. But before you buy your Minnesota property using an FHA home loan, there are a few things you need to know as a homebuyer.
You can take advantage of a 3.5% down payment when your credit score is at least 580. But you could still qualify for a loan insured by the Federal Housing Administration with an even lower credit score.
The FHA makes it easier for home buyers to gather the funds for the money down, with gifts from family and friends allowed. You can also take funds from retirement accounts as well as savings, checking, and money market accounts, though they will need 60 days of account statements to prove the origin of the funds.
While there are many benefits to using FHA, and approval is easier than a conventional loan, certain requirements still need to be met. The lender will check your finances and whether the dwelling meets FHA guidelines. There are also Minnesota FHA loan amount limits to consider, limiting the price of the home you are able to purchase using this loan.
2023 Minnesota FHA Loan Limits by County
Different Minnesota counties can have different limits. The minimum limit to borrow is set at $472,030 and applies to most counties except metropolitan areas where there is a larger limit.
| County | One-Family | Two-Family | Three-Family | Four-Family | Median Sale Price |
|---|---|---|---|---|---|
| AITKIN | $472,030 | $604,400 | $730,525 | $907,900 | $174,000 |
| ANOKA | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| BECKER | $472,030 | $604,400 | $730,525 | $907,900 | $238,000 |
| BELTRAMI | $472,030 | $604,400 | $730,525 | $907,900 | $175,000 |
| BENTON | $472,030 | $604,400 | $730,525 | $907,900 | $250,000 |
| BIG STONE | $472,030 | $604,400 | $730,525 | $907,900 | $92,000 |
| BLUE EARTH | $472,030 | $604,400 | $730,525 | $907,900 | $245,000 |
| BROWN | $472,030 | $604,400 | $730,525 | $907,900 | $158,000 |
| CARLTON | $472,030 | $604,400 | $730,525 | $907,900 | $200,000 |
| CARVER | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| CASS | $472,030 | $604,400 | $730,525 | $907,900 | $220,000 |
| CHIPPEWA | $472,030 | $604,400 | $730,525 | $907,900 | $110,000 |
| CHISAGO | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| CLAY | $472,030 | $604,400 | $730,525 | $907,900 | $280,000 |
| CLEARWATER | $472,030 | $604,400 | $730,525 | $907,900 | $110,000 |
| COOK | $472,030 | $604,400 | $730,525 | $907,900 | $225,000 |
| COTTONWOOD | $472,030 | $604,400 | $730,525 | $907,900 | $118,000 |
| CROW WING | $472,030 | $604,400 | $730,525 | $907,900 | $220,000 |
| DAKOTA | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| DODGE | $472,030 | $604,400 | $730,525 | $907,900 | $300,000 |
| DOUGLAS | $472,030 | $604,400 | $730,525 | $907,900 | $225,000 |
| FARIBAULT | $472,030 | $604,400 | $730,525 | $907,900 | $98,000 |
| FILLMORE | $472,030 | $604,400 | $730,525 | $907,900 | $300,000 |
| FREEBORN | $472,030 | $604,400 | $730,525 | $907,900 | $135,000 |
| GOODHUE | $472,030 | $604,400 | $730,525 | $907,900 | $260,000 |
| GRANT | $472,030 | $604,400 | $730,525 | $907,900 | $118,000 |
| HENNEPIN | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| HOUSTON | $472,030 | $604,400 | $730,525 | $907,900 | $225,000 |
| HUBBARD | $472,030 | $604,400 | $730,525 | $907,900 | $165,000 |
| ISANTI | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| ITASCA | $472,030 | $604,400 | $730,525 | $907,900 | $170,000 |
| JACKSON | $472,030 | $604,400 | $730,525 | $907,900 | $107,000 |
| KANABEC | $472,030 | $604,400 | $730,525 | $907,900 | $200,000 |
| KANDIYOHI | $472,030 | $604,400 | $730,525 | $907,900 | $183,000 |
| KITTSON | $472,030 | $604,400 | $730,525 | $907,900 | $75,000 |
| KOOCHICHING | $472,030 | $604,400 | $730,525 | $907,900 | $85,000 |
| LAC QUI PARLE | $472,030 | $604,400 | $730,525 | $907,900 | $90,000 |
| LAKE | $472,030 | $604,400 | $730,525 | $907,900 | $200,000 |
| LAKE OF THE WOODS | $472,030 | $604,400 | $730,525 | $907,900 | $130,000 |
| LE SUEUR | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| LINCOLN | $472,030 | $604,400 | $730,525 | $907,900 | $64,000 |
| LYON | $472,030 | $640,400 | $730,525 | $907,900 | $153,000 |
| MAHNOMEN | $472,030 | $604,400 | $730,525 | $907,900 | $75,000 |
| MARSHALL | $472,030 | $604,400 | $730,525 | $907,900 | $125,000 |
| MARTIN | $472,030 | $604,400 | $730,525 | $907,900 | $110,000 |
| MCLEOD | $472,030 | $604,400 | $730,525 | $907,900 | $225,000 |
| MEEKER | $472,030 | $604,400 | $730,525 | $907,900 | $185,000 |
| MILLE LACS | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| MORRISON | $472,030 | $604,400 | $730,525 | $907,900 | $190,000 |
| MOWER | $472,030 | $604,400 | $730,525 | $907,900 | $145,000 |
| MURRAY | $472,030 | $604,400 | $730,525 | $907,900 | $124,000 |
| NICOLLET | $472,030 | $604,400 | $730,525 | $907,900 | $245,000 |
| NOBLES | $472,030 | $604,400 | $730,525 | $907,900 | $176,000 |
| NORMAN | $472,030 | $604,400 | $730,525 | $907,900 | $85,000 |
| OLMSTED | $472,030 | $604,400 | $730,525 | $907,900 | $300,000 |
| OTTER TAIL | $472,030 | $604,400 | $730,525 | $907,900 | $210,000 |
| PENNINGTON | $472,030 | $604,400 | $730,525 | $907,900 | $153,000 |
| PINE | $472,030 | $604,400 | $730,525 | $907,900 | $197,000 |
| PIPESTONE | $472,030 | $604,400 | $730,525 | $907,900 | $92,000 |
| POLK | $472,030 | $604,400 | $730,525 | $907,900 | $248,000 |
| POPE | $472,030 | $604,400 | $730,525 | $907,900 | $172,000 |
| RAMSEY | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| RED LAKE | $472,030 | $604,400 | $730,525 | $907,900 | $89,000 |
| REDWOOD | $472,030 | $604,400 | $730,525 | $907,900 | $96,000 |
| RENVILLE | $472,030 | $604,400 | $730,525 | $907,900 | $104,000 |
| RICE | $472,030 | $604,400 | $730,525 | $907,900 | $275,000 |
| ROCK | $472,030 | $604,400 | $730,525 | $907,900 | $165,000 |
| ROSEAU | $472,030 | $604,400 | $730,525 | $907,900 | $156,000 |
| SCOTT | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| SHERBURNE | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| SIBLEY | $472,030 | $604,400 | $730,525 | $907,900 | $208,000 |
| ST. LOUIS | $472,030 | $604,400 | $730,525 | $907,900 | $200,000 |
| STEARNS | $472,030 | $604,400 | $730,525 | $907,900 | $250,000 |
| STEELE | $472,030 | $604,400 | $730,525 | $907,900 | $220,000 |
| STEVENS | $472,030 | $604,400 | $730,525 | $907,900 | $130,000 |
| SWIFT | $472,030 | $604,400 | $730,525 | $907,900 | $80,000 |
| TODD | $472,030 | $604,400 | $730,525 | $907,900 | $140,000 |
| TRAVERSE | $472,030 | $604,400 | $730,525 | $907,900 | $57,000 |
| WABASHA | $472,030 | $604,400 | $730,525 | $907,900 | $300,000 |
| WADENA | $472,030 | $604,400 | $730,525 | $907,900 | $145,000 |
| WASECA | $472,030 | $604,400 | $730,525 | $907,900 | $175,000 |
| WASHINGTON | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| WATONWAN | $472,030 | $604,400 | $730,525 | $907,900 | $112,000 |
| WILKIN | $472,030 | $604,400 | $730,525 | $907,900 | $168,000 |
| WINONA | $472,030 | $604,400 | $730,525 | $907,900 | $192,000 |
| WRIGHT | $515,200 | $659,550 | $797,250 | $990,800 | $448,000 |
| YELLOW MEDICINE | $472,030 | $604,400 | $730,525 | $907,900 | $90,000 |
Minnesota FHA Limits by County
How are FHA Loan Limits for Minnesota Decided?
The Federal Housing Finance Agency (FHFA) updates the baseline loan limit based on the House Price Index. The U.S. Department of Housing and Urban Development (HUD) uses this as a basis to decide the conforming loan limits.
There is a floor and a ceiling to the loan limits. The floor is 65%, and the ceiling is 150% of the conforming limit. In most counties in Minnesota, the floor applies. This means FHA can be used to buy single family homes in those counties that sell for $472,030 or less.
The floor means that even in counties where median sold prices are considerably lower than elsewhere in Minnesota, the same maximum loan limit will apply. For instance, the limit is the same in Lincoln County, where the median sales price is $64,000, as it is in Dodge County, where the average home is $300,000.
In the Twin Cities metropolitan area, prices are higher, and this is reflected in the FHA limits. In these counties, median sales prices are $448,000, and despite this being less than the limits for the rest of Minnesota, the limit is higher at $515,200. This allows room for buyers to purchase a home in these counties when prices rise.
How to Qualify for an FHA Loan
If the home you want to buy is within the loan limits for the county, there are still some other requirements to be met. One of the simplest requirements is that it has to be your primary residence and remain so for a year after purchase. Some of the other requirements include:
Credit score and money down
If your credit score is 580 or above, you can benefit from the FHA’s 3.5% down. Below that number, you’ll need 10% down to qualify for the mortgage.
Debt-to-income ratio
The ratio of your debts to your income is an important factor when applying for a loan. Your DTI cannot normally be more than 43%. If your financial history is strong, an exception could be made to allow qualification with a higher ratio, however.
FHA appraisal
The property has to be appraised before loan approval. An appraiser will check that it meets FHA guidelines, checking its condition. They will also assess the value using comparable local home sales. The lender wants to ensure the home is worth the amount of money you have offered for it.
Mortgage insurance premiums
The FHA requires borrowers to pay mortgage insurance. This protects the lender if the borrower defaults on the mortgage. With down payments as low as 3.5% and lower credit score requirements, there is more risk to lenders so insurance is required.
After being FHA approved, there will be two mortgage insurance premiums payable if your down payment is less than 20%. The upfront mortgage insurance premium (UFMIP) costs 1.75% of the base loan amount and can be rolled into the mortgage.
The other mortgage insurance premium (MIP) has to be paid each year in installments alongside mortgage payments. This can cost between 0.40% and 0.75% depending on your down payment and loan amount.
If your down payment is less than 10%, MIP will continue to be paid for the lifetime of the loan. But with a 10% or higher down payment, this can be canceled after 11 years. Refinancing or paying it off is the only way to remove the monthly premium with lower down payments.
Can FHA Be Used to Buy Multi-Family Homes?
FHA can be used to buy between single-family homes (1-unit) and 4-unit homes. With multi-family properties, you must live in the home and in one of the units. Rental income can be used in the loan approval, and a down payment of 3.5% is still an option when buying multiple-unit homes.
The loan limits are larger when buying multi-family homes with limits of $604,400 for 2 units, $730,5252 for 3 units, and $907,900 for 4 units in most parts of Minnesota. In the Minneapolis Saint Paul area, this increases to $659,550 for 2 units, $797,250 for 3 units, and $990,800 when buying 4 units.
Final Thoughts on Limits in Minnesota
Buying a home with an FHA mortgage offers many benefits. You don’t need the best credit, and you won’t have to wait as long to save for a down payment with lower requirements and gifts allowed.
Qualifying for an FHA home loan is easier than a conventional loan, but there are still requirements that have to be met. The property has to be within loan limits, and your finances need to meet their minimum requirements to be approved for your FHA loan.
