Loan limits are going to be rising in 2018 for loans guaranteed by the FHA. The Department of Housing and Urban Development (HUD) announced on Thursday that it was boosting limits for those loans in more than 3,000 counties. This provides FHA loans consistent with those of Fannie Mae and Freddie Mac. The Federal Housing Finance Agency announced new limits for loans qualified for purchase or guarantee by the GSEs on November 28.
90% of US Counties Will Receive FHA Loan Limit Boost
FHFA calculates limits on a yearly basis based upon median home prices nationally and in individual markets. The GSE limits for 2018 is going to be $453,100 for conforming loans and $679,650 for jumbo loans in a few high-cost areas. FHA limits vary from however are based on the GSE limits.
The Housing and Economic Recovery Act sets the floor for FHA mortgages at 65% of the GSE conforming limit. Thus, the floor will raise to $294,515 from $275,665. The floor pertains to those locations where 115% of the median home press is lower than the floor limit. In high-cost areas of the nation, FHA’s loan limit ceiling will match the GSEs, rising from $636,150 to $679,650. Many counties are going to have limits on a scale between floor and ceiling and the limits in MSAs will be based on the county within that market having the highest median home prices.
As a result of rapid increases in housing prices, loan limits will increase in 3,011 counties and will remain unchanged in 223. HUD states that 75 counties will be at the ceiling in 2018 in comparison with 82 under 2017 limits. You’ll find 502 counties with limits between floor and ceiling, down from 561 while the number of counties at the ceiling will rise from 2,589 to 2,655.
Limits for multi-unit properties were also revised. The floor for a two-unit property is going to be $377,075 and the ceiling will be $870,225. For buildings with three units the range will likely be from $455,800 to $1,051,875, and the respective numbers for four-units are $566,425 and $1,307,175. There are actually higher limits for one-to-four-unit properties located in Alaska, Guam, Hawaii, and the Virgin Islands. The entire list of FHA loan limits, by area can be found on FHA’s Loan Limits Page.
The national limit for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will raise to $679,650 from $636,150. This limit pertains to all HECM mortgages, no matter where the house is located.
These new limits are going to be effective for FHA case numbers assigned on or after January 1, 2018.
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