New limits on government-insured residential loans have been released, and nearly 200 U.S. counties will see an increase.
Limits on mortgages that are insured by the Federal Housing Administration are determined based on conforming loan limits.
Conforming loan limits determine the size of a loan that can be acquired or backed by either Fannie Mae or Freddie Mac.
On Nov. 25, the regulator and conservator of Fannie and Freddie, the Federal Housing Finance Agency,
announced the new loan limits for 2016.
FHFA kept next year’s conforming loan limit at $417,000.
On Wednesday, FHA announced that its national loan limit ceiling for high-cost areas — which is based on 150 percent of the conforming limit — will stay at $625,500
The floor — which is set at 65 percent of the national conforming limit — remains at $271,050.
Limits on traditional loans were discussed in Mortgagee Letter 2015-30, while limits on home-equity conversion mortgages were outlined in Mortgagee Letter 2015-29.
What did change for 2016 were the geographical areas that qualify for larger loans. FHA determines these limits using 115 percent of the median house price for the area.
According to the announcement, loan limits were raised in 188 counties.
FHA mortgagees can find limits by county online at https://entp.hud.gov/idapp/html/hicostlook.cfm.
