FHA Raises 2020 Forward, Reverse Loan Limits

The Federal Housing Administration published Mortgagee Letter 2019-19 and Mortgagee Letter 2019-20, which raises the maximum mortgage limits for FHA-insured Title II forward mortgages and Home Equity Conversion Mortgages.

Mortgagee Letter 2019-19 (https://www.hud.gov/sites/dfiles/OCHCO/documents/19-19hsgml.pdf) notes changes in the national median home price increased the Federal Housing Finance Agency loan limits, raising FHA’s “floor” and “ceiling” loan limits to $331,760 and $765,6001, respectively, for a one-unit property.

The new loan limits are effective for case numbers assigned on or after January 1, 2020, through December 31, 2020. 

For two-unit properties, the floor increases to $424,800; the high-cost ceiling rises to $980,325. For three-unit properties, the floor increases to $513,450; the high-cost ceiling rises to $1,184,925. And for four-unit properties, the floor rises to $638,100 and the ceiling increases to $1,472,500.

HUD noted as in previous years, Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a higher limit “ceiling” than the rest of the country.

The Mortgagee Letter noted while nearly all U.S. counties will see an increase in forward loan limits; however, due to changes made to the makeup of certain Metropolitan Statistical Areas by the Office of Management and Budget, 11 jurisdictions will see a loan limit decrease from the CY 2019 levels.

Mortgagee Letter 2019-20 (https://www.hud.gov/sites/dfiles/OCHCO/documents/19-20hsgml.pdf) raises the maximum claim amount for FHA-insured HECMs to $765,600 (150 percent of Freddie Mac national conforming limit of $510,400). There are no geographical variations to the maximum claim amount, including Alaska, Hawaii, Guam and the Virgin Islands.

The HECM limit has increased by more than $100,000 since 2018 and marks the fourth consecutive year of increases.