The Federal Housing Administration (FHA) recently 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 in 2018. 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 website.
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.