FHA Loan Limits to Rise in 2019
If you're looking to apply for an FHA mortgage, we have good news! On December 14, 2018 the Federal Housing Administration (FHA) announced their new schedule of loan limits. Due to an increase in housing prices, most areas in the country will see a slight increase in loan limits in 2019. These loan limits are effective for case numbers assigned on or after January 1, 2019, and will remain in effect through the end of the year.
FHA will increase its "floor" to $314,827 from $294,515. This new higher loan limit will affect a large portion of the country. Your loan limit is specific to your county, so to look up your new loan limit, click here and select "CY2019" for the Limit Year.
In addition to housing market limits, FHA loan limits are also affected by the loan-to-value (LTV) ratio which may vary in each transaction. The LTV is a calculation of the percentage of the loan satisfied by the down payment. Typical FHA single family forward mortgages include an LTV of 96.5% based on a minimum down payment of 3.5%. (In some cases, a higher down payment may be required based on a borrower’s financial qualifications.)
If you are wanting to apply for a new FHA loan, we can help.
No only did the "floor" increase, but in high-cost areas, the FHA national loan limit "ceiling" will also increase to $726,525 from $679,650. Additionally, the maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $726,525. This amount is 150 percent of the national conforming limit of $484,350.
Due to changes in housing prices and the resulting change to FHA's "floor" and "ceiling" limits, the maximum loan limits for forward mortgages increased in 2,948 counties. There were no areas with a decrease in the maximum loan limits for forward mortgages though they remain unchanged in 286 counties.
FHA calculates forward mortgage limits based on median house prices in accordance with the National Housing Act. FHA's Single Family forward mortgage limits are set by Metropolitan Statistical Area and county. Loan limits for reverse mortgages are also calculated but these do not vary by MSA or county; instead, a single limit applies to all mortgages in the regardless of where they are originated.