I did a preliminary FA Youth Cup middle as a L5 last season.
Even in the next round I was AR to a L5.
I'm guessing that for the first couple of rounds it's more to do with the availability of L4s, rather than there being a preferred minimum level for the middle.
There are hundreds of games to cover nationally that early on in the competition.
The fee structure would suggest Extra Preliminary through to 3rd qualifying would normally be level 4s or below if low coverage, 1st and 2nd round proper Level 3s, 3rd and 4th round proper Level 2s, then upwards from there
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