HUD Raises FHA Loan Limits for 2018

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Due to rising home prices, the U.S. Department of Housing and Urban Development (HUD) is raising the Federal Housing Administration (FHA) loan limits in about 90% of U.S. counties, effective Jan. 1, 2018.

Loan limits will rise in 3,011 counties but will remain unchanged in 223, HUD says in a release.

In high-cost areas of the country, the FHA’s loan limit ceiling will increase to $679,650 – up from $636,150.

The floor will rise to $294,515 – up from $275,665.

Additionally, the national mortgage limit for FHA-insured Home Equity Conversion Mortgages, or reverse mortgages, will increase to $679,650 from $636,150.

The FHA’s current regulations implementing the National Housing Act’s HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county. Instead, the single limit applies to all mortgages regardless of where the property is located.

The increase in loan limits will bring FHA loans in line with those of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA) announced new limits for loans eligible for purchase or guarantee by the GSEs on Nov. 28.

The FHFA calculates limits each year based on median home prices nationally and in individual markets. The GSE limits for 2018 will be $453,100 for conforming loans and $679,650 for jumbo loans in certain high-cost areas.

The Housing and Economic Recovery Act sets the floor for FHA mortgages at 65% of the GSE conforming limit.

The floor applies to those areas where 115% of the median home price is less than the floor limit.

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