# FHA Sets Loan Limits For 2016

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The Federal Housing Administration (FHA) has set its loan limits for 2016, raising them in 188 counties in order to account for increases in home prices.

The new loan limits are effective for case numbers assigned on or after Jan. 1, 2016.

Each year, the FHA recalculates its loan limits based on 115% of the median house price in each area. For counties, or equivalent, located in metropolitan statistical areas (MSAs), the limit for all areas in the MSA is calculated based on the highest-cost county.

The FHA's national loan limit ‘ceiling’ will remain at \$625,500, and the ‘floor’ will remain at \$271,050.

The FHA's minimum national loan limit floor is set at 65% of the national conforming loan limit of \$417,000. The floor applies to those areas where 115% of the median home price is less than 65% of the national conforming loan limit.

Any area where the loan limit exceeds the floor is considered a high-cost area. The maximum FHA loan limit ceiling for high-cost areas is 150% of the national conforming limit.

The mortgage loan limits for FHA-insured reverse mortgages will also remain unchanged.