As was the case recently for conventional conforming loan amounts, loan limits on forward and reverse mortgages insured by the Federal Housing Administration have been boosted for next year.
FHA floor loan limits are determined based on 65 percent of conforming limits on residential loans that are acquired by Fannie Mae and Freddie Mac.
Late last month, the regulator and conservator of Fannie and Freddie, the Federal Housing Finance Agency, reported that
the 2018 conforming limit has been set at $453,100.
On Thursday, the Department of Housing and Urban Development issued Mortgagee Letter 2017-16 indicating that the FHA floor limit on forward mortgages for next year on one-unit properties will increase to $294,515 from $275,665 in 2017.
On two-unit properties, the floor limit will be $377,075, while it will be $455,800 on three-unit properties and $566,425 on four-unit properties.
“This floor applies to those areas where 115 percent of the median home price is less than the floor limit,” the letter stated. “Any areas where the loan limit exceeds this ‘floor’ is considered a high-cost area, and HERA requires FHA to set its maximum loan limit ‘ceiling’ for high-cost areas at 150 percent of the national conforming limit.”
In high-cost areas, the one-unit ceiling limit is increasing to $679,650 in 2018 from $636,150 last year. The limit rises to $870,225 on properties with two units, $1,051,875 on three-unit properties and $1,307,175 on four-unit properties.
In Alaska, Guam, Hawaii and the Virgin Islands, the limits will range from $1,019,475 on one-unit properties to $1,960,750 on four-unit properties.
Thanks to rising home prices,
FHA loan limits are increasing in 3,011 counties, while no change will occur in 223 counties.
HUD also issued
Mortgagee Letter 2017-17 indicating the the maximum claim amount limit for FHA-insured home-equity conversion mortgages will be $679,650 next year.
FHA limits by county can be found online at https://entp.hud.gov/idapp/html/hicostlook.cfm.
