FHA/HUD announced new loan limits for 2019. The publication shows that most of the country will receive an increase in the FHA loan limit. FHA imposes county wide maximum loan amounts that are in line with housing costs and median incomes for the area. Do to an improving economy and increasing home prices, the changes were necessary according to HUD.
In high-cost areas, the new FHA loan limit will be $765,600, an increase from $726,525 in the 2018 publications. FHA will also increase the lowest limit to $331,760, up from 2018’s $294,515.
These new loan limits will be effective for FHA loans assigned on or after January 1, 2020.
FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set single-family forward loan limits at 115% of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county.
FHA’s 2019 minimum national loan limit, or floor, of $314,827 is set at 65% of the national conforming loan limit of $484,350. This floor applies to those areas where 115% of the median home price is less than the floor limit.
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% of the national conforming limit.
According to the FHA, the loan limit is going up in almost all of the 3,233 counties where it backs loans, but there are a handful of counties where the loan limit is actually going down.
Per data from the FHA, there are 11 counties where the loan limit is decreasing. In three of those counties (Dutchess County, New York; Orange County, New York; and Lincoln County, Idaho), the loan limit is decreasing by approximately 50%, due to the home price changes in those areas.
FHA’s full publication is available for download here
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