limits will be rising in 2018 for loans guaranteed by the FHA. The Department of Housing and Urban
Development (HUD) announced on Thursday it was boosting limits for those loans
in more than 3,000 counties. This will
bring FHA loans in line with those of Fannie Mae and Freddie Mac. The Federal
Housing Finance Agency announced new limits for loans eligible for purchase or
guarantee by the GSEs on November 28.
FHFA calculates limits each year based
on median home prices nationally and in individual markets. The GSE limits for 2018 will be $453,100
for conforming loans and $679,650 for jumbo loans in certain high-cost areas. FHA
limits differ from but are based on the GSE limits.
The Housing and Economic Recovery
Act sets the floor for FHA mortgages at 65 percent of the GSE conforming limit.
Thus, the floor will increase to $294,515 from $275,665. The floor applies to those areas where 115
percent of the median home press is less than the floor limit. In high-cost
areas of the country, FHA’s loan limit ceiling will match the GSEs, rising from
$636,150 to $679,650. Many counties will have limits on a scale between floor
and ceiling and the limits in MSAs will be based the county within that market
with the highest median home prices.
Due to rapid increases in housing
prices, loan limits will rise in 3,011 counties and will remain unchanged in
223. HUD says that 75 counties will be
at the ceiling in 2018 as compared to 82 under 2017 limits. There will be 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 will be $377,075 and the
ceiling will be $870,225. For buildings with three units the range will be from
$455,800 to $1,051,875, and the respective numbers for four-units are $566,425
and $1,307,175. There are higher limits for one-to-four-unit properties located
in Alaska, Guam, Hawaii, and the Virgin Islands. A complete list of FHA loan limits, by
area is available on FHA’s Loan
The national limit for FHA-insured
Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase
to $679,650 from $636,150. This limit applies to all HECM mortgages, regardless
of where the property is located.
These new limits will be effective
for FHA case numbers assigned on or after January 1, 2018.