Good news! Yesterday, the Federal Housing Administration (FHA) announced an increase to loan limits for FHA loans in 2018. This comes as a sigh of relief for homebuyers in 3,011 counties. For the past three years, the FHA has increased the number of counties to benefit from higher loan limits, with the biggest bump in 2017. For 2018, we will see an additional 63 counties added to the list, thus bringing the number of counties up to 3,011. Thanks to the Housing and Economic Recovery Act of 2008, the FHA sets the single family forward loan limits at 115% of the median house price. It’s subject to floor and ceiling limits therefore check with your loan officer for more information.
So how much is the increase? Well, in some high end areas, such as Los Angeles County, the ceiling will increase from $636,150 to $679,650. That is a 6.8% increase and it adjusts to meet the lending needs of homebuyers in areas where the cost of homes has grown significantly. The floor increases as well from $275,665 to $294,515. Even though most of the counties in the U.S will benefit from the increase, 228 counties won’t be positively impacted. Loan limits in those counties will remain the same.
Along with FHA loans, the FHA insured Home Equity Conversion Mortgages (HECM) or reverse mortgages will see an increase as well. HECM adjustments aren’t done on a county basis; therefore, it’s only a single assessment for the whole nation. That number will go up from $636,150 to $679,650 and this is great for those who qualify for the program.
If you’re in the market today and need to find a lender to work with, give me a call to help you finance your next mortgage transaction. I’m ready to help you with your financing questions, and I’ve got plenty of experience with loan limits, mortgage products, and market information to help you make the right choice.