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FHA Loan Limits In Portland, Oregon: How They Relate To Home Prices

FHA Loan Limits in Portland, Oregon: How They Relate to Home Prices

In 2021, the FHA loan limit for Portland, Oregon is $517,500 for a single-family property. The median home value in the city is now catching up to that figure. This article will outline how FHA loan limits compare with home prices in Portland.

Federal Housing Administration (FHA) home loans are a popular financing option with some Portland home buyers, particularly those seeking a low-down-payment mortgage product. These government-insured loans offer flexible qualification criteria for borrowers and down payments as low as 3.5%.

FHA Loan Limit for Portland Metro Area

There are limits to how much you can borrow when using an FHA loan to buy a house in Portland, or anywhere else in Oregon. For the calendar year 2021, the FHA loan limit for Portland is $517,500. That number is higher than the median home price in Portland, which was around $487,177 as of December 2020, giving homebuyers plenty of wiggle room.

So where do these limits come from, and how might they affect you as a borrower?

The FHA loan program is managed by the Department of Housing and Urban Development. So it’s a government-regulated housing agency. HUD officials establish the FHA loan limits for Portland, Oregon and the rest of the United States.

These limits are actually based on the ones used by the Federal Housing Finance Agency (FHFA), for non-government-backed conforming mortgage loans. Basically, the FHA cap for a particular area is based on a certain percentage of the conforming limits used by Freddie Mac and Fannie Mae.

At the end of 2020, housing officials announced they were raising the FHA loan limit for Portland, Oregon up to $517,500. This was done to keep pace with rising home values in the area. That’s the limit for single-family home purchases anywhere within the Portland metro area. It applies to the counties of Clackamas, Columbia, Multnomah, Washington and Yamhill:

County Name1-Unit 2-Unit 3-Unit 4-Unit
Clackamas$517,500$662,500$800,800$995,200
Multnomah$517,500$662,500$800,800$995,200
Washington$517,500$662,500$800,800$995,200
Yamhill$517,500$662,500$800,800$995,200

Live Portland Mortgage Rates Jan, 16, Sat, 2021

Home Prices Are Catching Up

Portland home buyers who use an FHA loan to buy a house must make a down payment of at least 3.5% of the purchase price or the appraised value. So the price of the house you are purchasing will influence the size of your down payment.

The median home value for Portland, Oregon is slowly catching up to the current (2021) FHA loan limit in the area. According to the real estate information company Zillow, the city’s median home value is $487,177 as of December 2020, as mentioned above.

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Here are those 2 numbers again:

  1. The 2021 FHA loan limit for Portland is $517,500.
  2. The median home price was around $487,177, in December 2020.

You might recall from the math classes of your youth that the “median” is basically the middle number — or midpoint — for a range of values. So a “median home price” means that half of the properties in the area are priced above that level, while the other half are priced below it.

The 2021 FHA loan limit for Portland is still quite higher than the median home value. This gives homebuyers some room to buy a home that is under the loan limit for FHA loans without risking going into jumbo loan territory.

Jumbo loans are loans that have loan amounts that are higher than the loan limit in a given county. Homebuyers who are looking at very expensive homes may find that the loan amount they need is higher than the FHA loan limit in their given county.

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Sammamish Mortgage is a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We have been offering a wide variety of mortgage programs and products with flexible qualification criteria since 1992. Please contact us if you have any questions or are ready to apply for a home loan.

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