2025 FHA Loan Limits in Lancaster County, PA (And How 10% Down Helps With MIP)

Understanding 2025 FHA loan limits in Lancaster County can make or break your budget—especially for first-time buyers comparing FHA vs. conventional or house-hackers eyeing 2–4 unit homes in places like Lancaster City, Manheim Township, Hempfield, Lititz, and Ephrata. Below, we’ll break down how FHA caps translate into real purchase prices, what documents you’ll need for pre-approval, and smart ways to trim closing costs.

DISCLAIMER: This article is for general education only and is not legal, tax, or lending advice. Loan programs, rates, fees, eligibility rules, and timelines change frequently and vary by lender and borrower profile. Examples are illustrative—not offers or guarantees. Before making decisions, consult a licensed mortgage lender and a qualified tax professional familiar with Pennsylvania and Lancaster County requirements

Maximum FHA-insured base loan amounts (Lancaster County, 2025):

• 1-unit: $524,225

• 2-unit: $671,200

• 3-unit: $811,275

• 4-unit: $1,008,300. FHA.com

What these limits actually mean: They’re max loan amounts, not max purchase prices. With the minimum 3.5% down, the 1-unit limit supports a price around $543,238 because 96.5% × price ≤ $524,225. (Lancaster is a standard “floor” county; higher limits only apply in designated high-cost areas.) FHA.comBankrate

Conventional comparison: In 2025, the conforming (conventional) limit is $806,500 for a 1-unit home in most PA counties—including Lancaster. If you need above FHA’s cap, conventional could fit better. FHFA.gov

You’re not limited to 3.5% down (and 10% down helps your MIP)

• Bigger down payments are allowed on FHA—3.5% is just the minimum for most borrowers.

• Upfront MIP (UFMIP) is generally 1.75% of the base loan amount (usually financed), regardless of down payment. answers.hud.gov

• Annual MIP rate: after HUD’s 2023 cut, most new 30-year FHA loans carry ~0.55% annually (exact factor varies by loan size/LTV/term). hud.gov

• Big win at 10% down: if your original LTV ≤ 90% (i.e., ≥10% down), annual MIP drops off after 11 years. With <10% down, annual MIP lasts for the life of the loan (unless you refi into conventional later). hud.govanswers.hud.gov

Buying a 3–4 unit with FHA?

You must owner-occupy and the property has to pass FHA’s self-sufficiency test (net rental income must meet or exceed PITI). Lenders calculate this using the appraiser’s rent, vacancy factors, and MIP in the payment. archives.hud.gov

Heads-up on timing: HUD updates loan limits annually (typically late November) for the following calendar year. hud.govarchives.hud.gov

Want help running your numbers (FHA vs. conventional, 3.5% vs. 10% down, payment impact)?
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