2023 FHA Loan Limits in Alabama
Alabama homebuyers looking for the flexibility of a loan insured by the Federal Housing Administration (FHA) can borrow up to $472,030 for a single-family home in any county within the state.
Alabama FHA loan limits by county
| County name | One unit | Two unit | Three unit | Four unit | Median sale price |
|---|---|---|---|---|---|
| AUTAUGA | $472,030 | $604,400 | $730,525 | $907,900 | $190,000 |
| BALDWIN | $472,030 | $604,400 | $730,525 | $907,900 | $275,000 |
| BARBOUR | $472,030 | $604,400 | $730,525 | $907,900 | $119,000 |
| BIBB | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| BLOUNT | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| BULLOCK | $472,030 | $604,400 | $730,525 | $907,900 | $103,000 |
| BUTLER | $472,030 | $604,400 | $730,525 | $907,900 | $135,000 |
| CALHOUN | $472,030 | $604,400 | $730,525 | $907,900 | $125,000 |
| CHAMBERS | $472,030 | $604,400 | $730,525 | $907,900 | $175,000 |
| CHEROKEE | $472,030 | $604,400 | $730,525 | $907,900 | $135,000 |
| CHILTON | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| CHOCTAW | $472,030 | $604,400 | $730,525 | $907,900 | $104,000 |
| CLARKE | $472,030 | $604,400 | $730,525 | $907,900 | $146,000 |
| CLAY | $472,030 | $604,400 | $730,525 | $907,900 | $66,000 |
| CLEBURNE | $472,030 | $604,400 | $730,525 | $907,900 | $163,000 |
| COFFEE | $472,030 | $604,400 | $730,525 | $907,900 | $165,000 |
| COLBERT | $472,030 | $604,400 | $730,525 | $907,900 | $151,000 |
| CONECUH | $472,030 | $604,400 | $730,525 | $907,900 | $115,000 |
| COOSA | $472,030 | $604,400 | $730,525 | $907,900 | $149,000 |
| COVINGTON | $472,030 | $604,400 | $730,525 | $907,900 | $103,000 |
| CRENSHAW | $472,030 | $604,400 | $730,525 | $907,900 | $116,000 |
| CULLMAN | $472,030 | $604,400 | $730,525 | $907,900 | $154,000 |
| DALE | $472,030 | $604,400 | $730,525 | $907,900 | $103,000 |
| DALLAS | $472,030 | $604,400 | $730,525 | $907,900 | $65,000 |
| DEKALB | $472,030 | $604,400 | $730,525 | $907,900 | $79,000 |
| ELMORE | $472,030 | $604,400 | $730,525 | $907,900 | $190,000 |
| ESCAMBIA | $472,030 | $604,400 | $730,525 | $907,900 | $207,000 |
| ETOWAH | $472,030 | $604,400 | $730,525 | $907,900 | $152,000 |
| FAYETTE | $472,030 | $604,400 | $730,525 | $907,900 | $78,000 |
| FRANKLIN | $472,030 | $604,400 | $730,525 | $907,900 | $95,000 |
| GENEVA | $472,030 | $604,400 | $730,525 | $907,900 | $163,000 |
| GREENE | $472,030 | $604,400 | $730,525 | $907,900 | $204,000 |
| HALE | $472,030 | $604,400 | $730,525 | $907,900 | $204,000 |
| HENRY | $472,030 | $604,400 | $730,525 | $907,900 | $163,000 |
| HOUSTON | $472,030 | $604,400 | $730,525 | $907,900 | $163,000 |
| JACKSON | $472,030 | $604,400 | $730,525 | $907,900 | $148,000 |
| JEFFERSON | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| LAMAR | $472,030 | $604,400 | $730,525 | $907,900 | $352,000 |
| LAUDERDALE | $472,030 | $604,400 | $730,525 | $907,900 | $151,000 |
| LAWRENCE | $472,030 | $604,400 | $730,525 | $907,900 | $188,000 |
| LEE | $472,030 | $604,400 | $730,525 | $907,900 | $309,000 |
| LIMESTONE | $472,030 | $604,400 | $730,525 | $907,900 | $271,000 |
| LOWNDES | $472,030 | $604,400 | $730,525 | $907,900 | $190,000 |
| MACON | $472,030 | $604,400 | $730,525 | $907,900 | $113,000 |
| MADISON | $472,030 | $604,400 | $730,525 | $907,900 | $271,000 |
| MARENGO | $472,030 | $604,400 | $730,525 | $907,900 | $71,000 |
| MARION | $472,030 | $604,400 | $730,525 | $907,900 | $120,000 |
| MARSHALL | $472,030 | $604,400 | $730,525 | $907,900 | $151,000 |
| MOBILE | $472,030 | $604,400 | $730,525 | $907,900 | $145,000 |
| MONROE | $472,030 | $604,400 | $730,525 | $907,900 | $67,000 |
| MONTGOMERY | $472,030 | $604,400 | $730,525 | $907,900 | $190,000 |
| MORGAN | $472,030 | $604,400 | $730,525 | $907,900 | $188,000 |
| PERRY | $472,030 | $604,400 | $730,525 | $907,900 | $121,000 |
| PICKENS | $472,030 | $604,400 | $730,525 | $907,900 | $204,000 |
| PIKE | $472,030 | $604,400 | $730,525 | $907,900 | $136,000 |
| RANDOLPH | $472,030 | $604,400 | $730,525 | $907,900 | $125,000 |
| RUSSELL | $472,030 | $604,400 | $730,525 | $907,900 | $270,000 |
| SHELBY | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| ST. CLAIR | $472,030 | $604,400 | $730,525 | $907,900 | $293,000 |
| SUMTER | $472,030 | $604,400 | $730,525 | $907,900 | $93,000 |
| TALLADEGA | $472,030 | $604,400 | $730,525 | $907,900 | $108,000 |
| TALLAPOOSA | $472,030 | $604,400 | $730,525 | $907,900 | $149,000 |
| TUSCALOOSA | $472,030 | $604,400 | $730,525 | $907,900 | $204,000 |
| WALKER | $472,030 | $604,400 | $730,525 | $907,900 | $75,000 |
| WASHINGTON | $472,030 | $604,400 | $730,525 | $907,900 | $145,000 |
| WILCOX | $472,030 | $604,400 | $730,525 | $907,900 | $101,000 |
| WINSTON | $472,030 | $604,400 | $730,525 | $907,900 | $111,000 |
How are FHA loan limits determined?
FHA loan limits change annually based on a percentage of the conforming loan limits published by the Federal Housing Finance Agency (FHFA) for conventional loans. The adjustments reflect changes in the average U.S. home price over the past year and include limits for high- and low-cost areas.
Here’s how the calculations work:
The low-cost limit or “floor” is $472,030 for a single-family home, which is 65% of the national conforming loan limit of $726,200 in 2023. If you’re buying a multifamily home, you’ll have a little more borrowing power, as the limits increase with each unit:
- $604,400 for a two-unit home
- $730,525 for a three-unit home
- $907,900 for a four-unit home
In case you’re wondering, there are no “high-cost” counties in the state of Alabama — the low-cost limits apply to all counties in the state.
How to qualify for an FHA loan in Alabama
FHA loans may be a good choice if you’re not able to qualify for a conventional loan. With the median home price topping out at $352,000 for the most expensive counties in the state (as of December, 2022), you won’t have to worry about borrowing more than the $472,030 Alabama one-unit home limit.
Here’s a breakdown of the most current requirements to qualify for an FHA loan in Alabama:
Down payment and credit score. You’ll need at least a 3.5% down payment and a minimum credit score of 580. The funds can come from a gift from friends, family and even employers. Borrowers with scores as low as 500 may qualify if they can come up with at least a 10% down payment to qualify.
Debt-to-income (DTI) ratio. The FHA measures how much monthly debt you carry compared to your income to calculate your DTI ratio. The maximum for your total debt plus your new mortgage payment is 43%, but exceptions may be possible with strong credit scores or extra cash reserves.
Mortgage insurance. Two types of FHA mortgage insurance are charged to protect lenders in case you default. The first is an upfront mortgage insurance premium (UFMIP) of 1.75% of your loan amount, which is usually added to your mortgage balance. The other is an annual mortgage insurance premium (MIP) of 0.45% to 1.05% of the loan amount, divided by 12 and added to your monthly payment. One drawback to FHA mortgage insurance: You’ll pay it regardless of your down payment amount.
Occupancy. You can only buy a primary residence with an FHA loan.
FHA home appraisals. The FHA requires appraisals for any purchase loan, with stricter FHA appraisal guidelines than conventional appraisals.
Buying a multifamily property with an FHA loan
One unique feature of FHA loans is the ability to buy a multifamily home with a low down payment, and use the rental income to help you qualify for the loan. You’ll need to live in one of the units for at least 12 months after you purchase it, and can use the higher multifamily FHA loan limits to buy up to a four-unit home with only a 3.5% down payment. The rent from the other units can be added to your qualifying income.
If you don’t mind becoming a homeowner and a landlord at the same time, this is a great way to buy a home and let your tenants help you build equity with their rent checks.
FHA lenders in Alabama
| Lender name | LT rating | Minimum FHA credit score |
|---|---|---|
| Rocket Mortgage | 5 stars | 580 |
| Chase Mortgage | 5 stars | Not disclosed |
| Wells Fargo | 5 stars | Not disclosed |
| Bank of America | 5 stars | Not disclosed |
| Better Mortgage | 5 stars | 620 |