FHA Increases Loan Limits Beginning January 2018

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This  BLOG On FHA Increases Loan Limits Beginning January 2018 Was Written By Gustan Cho NMLS 873293

The economy has been hot all of 2017.

  • The stock market hit five all-new time highs
  • Economic numbers have never been improving since the Great Depression of 2008
  • Home Prices have been increasing with no sign of a slow down or correction
  • Home values are increasing nationally
  • Some areas there has been double-digit appreciation of housing prices
  • The FHFA has increased the conforming loan limits twice in two years
  • The new increase on conventional loans announced by FHFA will take effect on January 2018
  • FHA followed FHFA lead on increasing loan limits on FHA Loans

FHA And FHFA Increases Loan Limits Due To High Prices

Both agencies, FHFA and FHA, increase loan limits due to escalating home values nationwide.

  • Housing prices have been going up the past couple of years and there is not an area in the United States that home values are not rising
  • There is more demand overall in home buyers than there are an inventory of homes
  • Due to rising home values, the FHFA has to increase conventional loan limits to $453,100 a few weeks ago effective January 2017
  • When conforming loan limits increase, government loan limits follow
  • This is the reason for FHA Increases Loan Limits
  • It was no surprise that the U.S. Department of Housing and Urban Development (HUD), the parent of the Federal Housing Administration (FHA) has followed FHFA lead where FHA Increase Loan Limits beginning of 2018 to $294,515
  • All brand new FHA Increases Loan Limits will be taking effect on all FHA Case Assignment Numbers that is a date on January 1, 2018 and thereafter

National Housing Act And Housing And Economic Recovery Act Of 2008

HUD requires its subsidiary, The Federal Housing Administration (FHA), to set FHA Forward Loan Limits on Single Family Homes at 115% of national median home values subject to a floor and ceiling on the loan limits.

  • This is mandated by the National Housing Act which is amended by the Housing And Economic Recovery Act Of 2008
  • The Federal Housing Administration figures forward FHA Loan Limits by the Metropolitan Statistical Area and Counties
  • A few years ago in 2016, HUD increased mortgage limits for 188 counties in the United States
  • The numbers changed in 2017 to 2,948 counties which was a substantial jump
  • Today, the number escalated to 3,011 counties

FHA High-Cost Areas And FHA Jumbo Loans

There are many counties in areas like California where it is labeled as high cost areas. FHA Loans in high-cost areas are often referred to as High Balance FHA Loans and/or FHA Jumbo Loans.

  • FHA Loan Limits in high-cost areas like Los Angeles County will jump to $679,650
  • Currently, the FHA Loan Limits in high-cost areas is at $636,150
  • In most counties in the United States where it is not labeled as high-cost areas, the loan limit will go up from the current $275,665 to $294,515 starting January 2018
  • 223 counties in the U.S. will have loan limits on FHA Loans the same and not have an increase

FHA Loan Limits On Reverse Mortgages

Good news for reverse mortgage borrowers. National FHA Loan Limits in high-cost areas for Reverse Mortgages, also referred to as Home Equity Conversion Mortgages, will rise from the current $636,150 to $679,650 effective on January 1, 2017. FHA Reverse Mortgage Loan Limits cannot vary by region like forwarding FHA Loans. The higher FHA Reverse Mortgages is effective in all counties and not just limited to high-cost areas.

Qualifying For FHA Loans With Higher Loan Limits

Home Buyers who need to qualify with a direct lender with no overlays on FHA Loans can contact The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays. The higher loan limits on FHA Loans will take effect on all FHA Case Numbers as of January 1, 2018 and thereafter. The increase in FHA Loan Limits follows immediately after the Federal Housing Finance Agency announced that conforming loan limits will rise to $453,100 effective January 2018. Increase in loan limits is due to higher home prices nationally.

UPDATED TO THIS BLOG ON FEBRUARY 23rd, 2019

The is was UPDATED On February 23rd, 2019. FHFA has increased Conventional Loan Limits again for 2019 to $484,300. HUD increased FHA Loan Limits to $314,827. Both agencies increased loan limits due to rising home prices. We will keep our viewers updated as both agencies increase loan limits in the future.

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