FHA Announces Increased Single-Family Loan Limits for 2017
The Federal Housing Administration (FHA) announced yesterday the county loan limits for its single-family mortgage programs for 2017 and issued a Mortgagee Letter that increases the minimum loan limit for low-price areas and the maximum loan limit for high-cost areas.
FHA currently sets the loan limit for most counties at 115 percent of the county’s median home price. Mortgages that exceed the limit are not eligible for FHA insurance. In addition, FHA also establishes a “floor” for low-cost areas, which it defines as counties where the median home price is 65 percent or less of the Federal Housing Finance Agency’s (FHFA) conforming loan limit. Similarly, FHA also establishes a maximum loan limit for high-cost areas, where the median home price reaches or exceeds 150 percent of the conforming loan limit.
Last month, FHFA announced that it was increasing its conforming loan limit for 2017 to $424,100 from $417,000, the first increase since 2006. HUD’s Mortgagee Letter increases FHA’s loan limits for low-cost and high-cost areas to reflect this change. Specifically, the low-cost limit will increase to $275,665 from $271,050, and the high-cost loan limit will increase from $625,500 to $636,150.
The maximum loan limit will increase in 2,948 counties and stay the same in 286 counties. No counties will see a limit decrease. FHA has released a chart listing each county where the limits increased.
The new limits will apply to all loans assigned FHA case numbers as of January 1, 2017.