The Federal Housing Administration (FHA) recently announced higher FHA loan limits for Chicago and surrounding counties in Illinois for 2023. The new limits, which took effect on January 1, 2023, make it possible for more homebuyers in Chicago and the suburbs to qualify for an FHA-insured mortgage.
FHA loans are popular with first-time homebuyers because they require a low down payment of just 3.5% and are more flexible in their credit score requirements. The FHA sets maximum loan amounts, known as conforming loan limits, for each county based on the median home price in that area. Counties with higher home prices have higher FHA limits.
For 2023, the FHA increased the baseline national conforming loan limit to $472,030, up from $420,680 in 2022. The new limit applies to Chicago and most counties in the Chicago metro area, including Cook, Lake, DuPage, Will, Kane, and McHenry counties. The higher limit means homebuyers can qualify for a larger FHA mortgage to purchase a home.
A few higher-cost counties in the Chicago area have even higher FHA limits for 2023. In Lake County, the 2023 FHA limit is $647,200, up from $570,000 in 2022. The limit for Cook County also increased to $647,200. These higher limits reflect the significant home price appreciation and demand for housing in neighborhoods close to Chicago.
The increased FHA limits for 2023 are welcome news for Chicago homebuyers and the local housing market. Higher loan limits give more buyers the opportunity to purchase a home with an FHA mortgage and take advantage of low down payments and flexible underwriting. For many first-time homebuyers, the higher limits could make homeownership achievable in 2023.
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