Today, we’ll be exploring the ins and outs of getting an FHA loan in Alabama and help you navigate the path to home ownership in the Heart of Dixie.
From the requirements to the benefits of an FHA loan, we’ll cover everything you need to know to make your dream of owning a home in Alabama a reality.
2023 Alabama FHA Loan Limits by County
| County | Single-Family | Duplex | Triplex | Fourplex | Median Home 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 |
Requirements for an FHA Loan in Alabama
To qualify for an FHA loan in Alabama, you’ll need to meet certain criteria. Your credit score is the most important factor. If your score is 580 or higher, you’ll be eligible for a down payment of just 3.5%. If your score is between 500 and 579, you’ll still be able to get an FHA loan, but you’ll need to make a down payment of 10%.
The FHA also requires you to pay a Mortgage Insurance Premium (MIP). This is a safety net that protects you from potential default. To qualify, you’ll need to have a debt-to-income ratio of less than 43%.
The property you’re buying must be your primary residence. This requirement is in place to promote homeownership and community stability, not investment properties. You’ll also need to demonstrate a steady income and proof of employment to show that you can handle the mortgage repayments.
Additionally, there is a wide range of appraisal requirements that a house must meet, which can play into the age, location, condition, and price range of homes you can consider. For example, to be approved for an FHA loan in Alabama, the roof on the home you are looking to purchase needs to be stable enough to last another two to three years, as well as not allow any moisture intrusion. A roof replacement will be mandatory on any home that has a roof with less than two years of life or that appears to have been layered.
In summary, an FHA loan in Alabama is a great way to get into homeownership. With the right credit score, MIP, and debt-to-income ratio, you can get the keys to your dream home. Just make sure you have your income and employment proof ready.Don’t wait any longer – explore the FHA loan option today and take the first step towards owning your own home.
Should You Get an FHA Loan in Alabama?
When considering an FHA loan in Alabama, there are several unique considerations to keep in mind. Firstly, the FHA loan limits can influence your buying options, particularly in neighborhoods or cities where home prices exceed these limits. In higher cost areas, it could make sense to pursue a strategy like house hacking.
Additionally, Alabama’s significant rural areas present unique considerations, as some rural properties might not meet the FHA’s property eligibility requirements, which stipulate a certain distance from high-traffic roads, livestock, and commercial enterprises.
Furthermore, Alabama has a considerable sector of manufactured homes. While FHA does insure loans for these homes, they must meet specific criteria, such as a permanent foundation and compliance with particular construction and safety standards. Weather-related issues, like the state’s susceptibility to tornadoes, could also impact homeownership costs and influence the need for homes to meet certain safety standards.
Lastly, Alabama’s real estate market conditions can vary significantly by region. In some areas, sellers may favor buyers with conventional financing due to its perceived simplicity compared to FHA loans. This dynamic could affect the competitiveness of your offer. Given these varying factors, consulting with a knowledgeable real estate professional or lender familiar with the Alabama market is highly recommended.
Top FHA Lenders in Alabama
Alabama is home to many lenders that specialize in FHA loans. Here, we’ll take a look at some of the best lenders in the state for getting an FHA loan.
FHA Lenders in Alabama
- Regions Bank
- BBVA Compass
- Wells Fargo
- Cadence Bank
- Synovus Bank
