HUD announces higher FHA home loan limitsMortgagePress.comFHA loans
United States Department of Housing and Urban Development
Secretary Alphonso Jackson has announced that the Federal Housing
Administration (FHA) has increased its single-family home mortgage
limits by more than 15 percent.
Effective Jan. 1, FHA will insure single-family home mortgages
up to $200,160 in standard areas and up to $362,790 in high-cost
areas. The high-cost amount is almost $50,000 more than last year.
The loan limits for two-, three- and four-unit dwellings have also
increased. The FHA is sending letters to thousands of mortgage
lenders and brokers to make them aware of the higher rates that can
"This administration is working to make homeownership more
affordable and accessible, so that more families can own a piece of
the American dream," said Jackson. "These higher loan limits will
strengthen the economy by helping to create more construction and
more jobs, while contributing to the president's commitment to
create 5.5 million new minority homeowners by the end of the
Last year, the loan limits were $172,632 in standard areas and
$312,895 in high-cost areas. Five years ago, the limits ranged from
just $132,000 to $239,250. These levels were below the cost of many
homes in many communities. As a result, families who needed FHA
mortgage insurance to qualify to buy a home were effectively locked
out of the process.
The new loan limits are part of an annual adjustment HUD makes
to account for rising home prices. Under federal law, loan limits
are tied to the conforming loan limits of Freddie Mac and Fannie
Mae, federally chartered corporations that buy and package
mortgages. HUD calculates the FHA mortgage loan limit for 3,226
geographic areas within the United States. The limits vary from
area to area, but all fall within the new range of $200,160 to
Higher FHA loan limits don't cost the government any money,
because the FHA Insurance Fund is fully supported by premiums paid
by borrowers who receive FHA insurance.
Many low-income and first-time homebuyers are attracted to
FHA-insured loans, because the agency requires only a 3 percent
down payment, and this year's increases in insurance totals should
only serve to intensify interest. The increases will also benefit
senior citizens who qualify for FHA-insured reverse mortgages.
For more information, visit www.hud.gov.