FHA Basics

• When the FHA originated in 1934, its main purpose was to offer an alternative to first-time homebuyers unable to meet down payment requirements of conventional loans. Over time, the FHA, which has been part of the Department Housing and Urban Development (HUD) since 1965, has become a popular choice for buyers with limited savings and with real estate investors seeking a low capital investment.
  
  

FHA Mortgage Insurance

• FHA loans require borrowers to carry FHA mortgage insurance as a protection for lenders that take on these more risky mortgages. FHA mortgage often includes an upfront mortgage insurance premium payment as well as monthly installments paid with your mortgage payment. Specific amounts of premiums vary somewhat based on the loan amount. However, annual premiums are usually about 1.1 percent to 1.15 percent of the loan amount per year, indicates Bills.com.
  
  

FHA Loan Limits

• The FHA sets maximum loan amounts for every state and county. As of May 2011, $271,050 is the standard single unit residential property maximum loan amount for most U.S. counties considered typically priced housing areas. Most of Ohio's counties have this limit. These loan limits, along with required FHA mortgage insurance for borrowers, are protective measures to motivate FHA-approved lenders to finance these riskier loans.
  
  

Ohio FHA Limits

• Standard FHA loan limits are $271,050, $347,000, $419,425 and $521,250 for one- to four-unit properties, respectively, according to FHA.com. Ohio does have several counties, especially in the Cincinnati, Cleveland and Columbus metro areas with higher maximum allowances. Several counties have limits over $300,000 for one-unit properties. The highest limits in Ohio are in Athens, which has limits of $432,500, $553,650, $669,250 and $831,750, respectively.