How can you have a loan amount that’s higher than the FHA limit in Lake County? Can a seller hold a small note for an FHA, like a second mortgage? Today we’ll answer both of these questions.

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In the final installment of our series where we answer agents’ questions, today we’re fielding a two-parter from Allison Wheatley of First Realty.

First, she asks, “Someone said that the FHA loan limit in Lake County is $274,850; however, one of my buyers has a loan amount of $285,000. How does that work?”

Secondly, she asks, “Can the seller hold a small note for an FHA, like a second mortgage?”

To answer her first question, the FHA does set loan limits per county, and they’ll change based on what county you live in. The FHA loan limit in Lake County is $274,850, but that’s not the purchase price limit. People can purchase homes for however much they want, but the FHA has stated that they will not lend any more than the $274,850 limit in that county.


For example, if somebody wants to buy a house that costs $300,000, that’s perfectly OK; however, they’re going to have to put down the extra $25,150 to bring the base loan amount down to the FHA loan limit in our county.

To answer her second question, the FHA doesn’t allow interested party contributions such as seller-held second mortgages into the transaction. The only thing the sellers can do, per FHA guidelines, is help pay up to 6% in closing costs into the transaction.

If you or your buyers have any other questions in regard to FHA loans or their requirements, please don’t hesitate to give us a call. We’d be happy to help!