Higher Home Prices Spark Increases
The Federal Housing Administration (FHA) announced the agency’s new schedule of loan limits, and due to an increase in housing prices, most areas in the country will see an increase in loan limits in 2017. These loan limits are effective for new applications made on or after January 1, 2017, and will remain in effect through the end of the year. In high-cost areas, the FHA national loan limit “ceiling” for one-unit properties will increase to $636,150 from $625,500 in areas such as Washington, DC. FHA will also increase its “floor” to $275,665 from $271,050. Additionally, the maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $636,150. This amount is 150 percent of the national conforming limit of $424,100.
Due to changes in housing prices and the resulting change to FHA’s “floor” and “ceiling” limits, the maximum loan limits for forward mortgages increased in 2,948 counties. There were no areas with a decrease in the maximum loan limits for forward mortgages, though they remain unchanged in 286 counties. FHA’s minimum national loan limit “floor” is set at 65 percent of the national conforming loan limit of $424,100. The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit.
Source: FHA — If you would like to know where the limits moved to in your area, please contact us.