HUD Announces FHA Loan Limit Increases for 3,000+ Counties

HUD this afternoon announced a new schedule of FHA loan limits for 2019, with most areas in the country to experience an increase in loan limits in the coming year.  

The new loan limits are effective for FHA case numbers assigned on or after January 1, 2019.     

In high-cost areas of the country, FHA’s loan limit ceiling will increase to $726,525, from $679,650. FHA will also increase its loan floor to $314,827 from $294,515.  

Additionally, HUD said the maximum claim amount for FHA-insured Home Equity Conversion Mortgages, or reverse mortgages, will increase to $726,525 from $679,650. 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.  

HUD said as a result of “robust increases” in median housing prices and required changes to FHA’s floor and ceiling limits, which are tied to the Federal Housing Finance Agency’s increase in the conventional mortgage loan limits for 2019, the maximum loan limits for FHA forward mortgages will rise in 3,053 counties. In 181 counties, FHA’s loan limits will remain unchanged.  

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 percent 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.  

The National Housing Act, as amended by HERA, requires FHA to establish its floor and ceiling loan limits based on the loan limit set by FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. FHA’s 2019 minimum national loan limit, or floor, of $314,827 is set at 65 percent of the national conforming loan limit of $484,350. This floor applies to those areas where 115 percent of the median home price is less than the floor limit. Any areas where the loan limit exceeds this ‘floor’ are considered a high-cost areas, and HERA requires FHA to set its maximum loan limit ‘ceiling’ for high-cost areas at 150 percent ($726,525) of the national conforming limit.  

Links:  

FHA Loan Limits page: https://www.hud.gov/program_offices/housing/sfh/lender/origination/mortgage_limits.  

Mortgagee Letter 2018-11: https://www.hud.gov/sites/dfiles/OCHCO/documents/18-11hsgml.pdf.  

Mortgagee Letter 2018-12 (HECM) https://www.hud.gov/sites/dfiles/OCHCO/documents/18-12hsgml.pdf.