FHA Loan Limits to Rise in More than 3,000 Counties in 2018

Filed in Housing Finance by on December 7, 2017 1 Comment

The Federal Housing Administration (FHA) today announced its loan limits for 2018. The nationwide rise in median home prices indicates buyers in more than 3,000 counties will see increases.

The FHA’s floor is set at 65% of the national conforming loan limit, which will increase from $424,100 to $453,100 next year. That makes the new FHA limit rise from $275,665 to $294,515. This floor applies to areas where 115% of area median home price is less than $294,515. For these areas, the loan limit is the floor.

The FHA high-cost ceiling is 150% of the national conforming loan limit, which will increase from $636,150 to $679,650. High-cost areas are those where 115% of the median home price is greater than the floor ($294,515) but less than the ceiling ($679,650). In these areas, the limit equals 115% of the median home price.

In 223 counties, FHA’s loan limits will remain unchanged, and there are no counties where the limit decreased. The new loan limits will apply to all loans assigned FHA case numbers on or after Jan. 1, 2018. The 2018 FHA loan limits by Metropolitan Statistical Area (MSA) or county can be reviewed on FHA’s loan limits webpage.

FHA also increased the loan limits for its Home Equity Conversion Mortgage (HECM), or reverse mortgage program, to $679,650 from $636,150. FHA HECM program regulations do not allow loan limits to vary by MSA or county, so this limit applies to all mortgages regardless of location.

For more information, contact Curtis Milton at 800-368-5242 x8597.

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  1. While it’s nice that the loan limits were increased, I’d bet that most FHA borrowers would prefer to have the Mortgage Insurance Premium (MIP) lowered instead… or at least made cancelable for borrowers who reach a 20 percent equity stake, as is the case with conventional Private Mortgage Insurance. Still, being able to access more mortgage money with as little as a 3.5% down payment should be valuable to at least some potential homebuyers, most likely first-time buyers.

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