Articles Tagged With: FHA Loan Limits

December 8, 2020

FHA And HUD Explain Higher FHA Loan Limits In 2021

On December 2, 2020, the FHA and HUD issued a press release announcing higher FHA mortgage loan limits for 2021. Those applying for FHA mortgages with FHA case numbers assigned on or after 1 January 2021 will have higher loan guaranty limits to work with than in 2020. The same thing happened last year, but higher loan limits in the new year are NOT guaranteed to happen year-to-year. But this year, it DID happen and the FHA has explained the hows and whys. Why did limits go higher for the new year? FHA is required by a federal law known as the National Housing Act, (which itself was amended by the Housing and Economic Recovery Act of 2008) to “…set Single Family forward loan limits at 115 percent of area | more...

December 3, 2020

Higher FHA Loan Limits In 2021

By Bruce Reichstein

The FHA and HUD have announced higher FHA forward loan limits for 2021. Most borrowers will experience a higher FHA loan limit depending on their location and other variables. Federal law requires FHA to establish forward mortgage / purchase loan floor and ceiling loan limits each year. These limits are based on the loan limit set by the Federal Housing Finance Agency for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. The national conforming loan limit for 2021 is $548,250. While these limits DO NOT apply until 1 January 2021, you can locate the entire list of FHA loan limits. That list includes areas at the FHA ceiling, areas between the floor and the ceiling at the FHA official site. The National Housing Act and its amendments | more...

July 23, 2020

FHA Loan Limits: Where To Find Them

By Bruce Reichstein

FHA home loans, like most government-backed mortgages except for VA loans, feature loan guaranty limits which are established by county. These are annual limits and are revised (or at least considered for revision) every year. The FHA and HUD set FHA loan limits for areas that are average-cost housing markets, but also for high-cost counties and low-cost areas. FHA loan limits vary depending on a variety of factors including the nature of the cost of local housing. States have similar FHA loan limits in most counties with an outlier here or there; other housing markets (including California and New York) may have more high-cost counties than low-cost ones. East Coast real estate markets can be notorious for this, depending on location, and the FHA loan limit rules are designed to | more...

July 16, 2020

Answers To FHA Loan Limit Questions

By Joe Wallace

There are some common questions about FHA home loan limits for the Single-Family Mortgage program. Do you know what the home loan limit is in your area or how it affects your mortgage transaction? Do All Government-Backed Mortgages Include Loan Limits? At one time, all government-backed home loans carried a loan limit. However, in 2020 after changes in federal law, the Department of Veterans Affairs altered its VA Home Loan program to eliminate mortgage loan limit requirements. FHA mortgages and USDA mortgages still have loan limits. What Are FHA Loan Limits? The FHA loan limit is a calculation made by the FHA. The limit is based on “the median house prices in accordance with the National Housing Act” according to the official site. The limits are published once at the | more...

July 14, 2020

FHA Loan Limits For High-Cost and Low-Cost Areas

By Bruce Reichstein

FHA mortgages have limits established by county–the limits are not the same in all markets or in all zip codes nationwide. It is true that FHA loan limits are the same for a great many zip codes, but not all. FHA loan limits vary depending on whether the housing market in question is in a high-cost area, a low-cost area, or one that is “typical”. And the amount of the FHA loan limits have nothing to do with the borrower’s ability to qualify for a loan or for a specific amount–you can’t qualify for a higher loan limit by having a better FICO score. FHA home loan limits are set nationwide, usually once at end of the previous year–the annual limits are posted by the FHA and HUD, and go | more...

July 7, 2020

How FHA Home Loan Limits Are Set

By Joe Wallace

How does your lender know how much home loan to approve you for when you want to buy a home? Part of that process is learning the official FHA home loan limit in the housing market where you want to buy or build your home. The Federal Housing Administration sets FHA loan limits each year. There is a maximum FHA loan amount that is established in accordance with the National Housing Act. Five Things You Need To Know About FHA Loan Limits Five things you’ll need to remember about FHA purchase loan limits for suburban homes, condo units, having a house built for you on your own lot, etc. are: FHA mortgage loan limits vary by county; Loan limits may be exceeded if you are applying for an FHA Jumbo | more...

July 6, 2020

How FHA Loan Limits Work

By Bruce Reichstein

New home buyers have a lot to learn about the process of applying for and being approved for FHA home loans. The advantages of the FHA mortgage include lower down payment requirements and more forgiving FICO score rules…but how can a new borrower know how much loan they are permitted to apply for? HUD 4000.1, explains how FHA loan limits work. This handbook, a comprehensive guide to the FHA Single-Family Home Loan program, explains how loan limits work: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio.” These limits are set based on median house prices and are influenced by the home loan limits established by Freddie Mac and Fannie Mae. One Size | more...

December 17, 2019

FHA Home Loan Limits: Facts You Should Know In 2020

By Bruce Reichstein

What kind of loan do you need in the new year? Are you interested in an FHA One-Time Close construction loan to build on your own land? An FHA purchase loan for existing construction? You’ll need to know a bit about home loan limits and how they affect your transaction. The FHA and HUD announced higher loan guaranty limits for another year–2020 rates will increase in many housing markets with a small number of areas receiving no increases. Conforming Loan Limits In 2020 A conforming loan is a mortgage meeting guidelines established by Fannie Mae and Freddie Mac including a maximum dollar amount. Your FHA home loan can be at or below a certain amount established each year by county. Conforming loan limits are basically the Fannie and Freddie limits | more...

December 10, 2019

Higher FHA Home Loan Limits For 2020

By Bruce Reichstein

In 2019, the FHA and HUD announced higher loan limits, giving borrowers in most counties additional borrowing power to purchase, build, repair, or refinance an owner-occupied home. The uptick in FHA loan limits for 2019 led some to believe that it might be possible to see another year of higher loan limits, while others speculated that higher limits may not be a trend, but simply a typical course correction for home loan limits. Regardless of which camp 2020 borrowers were in back then, it seems there is another year to contemplate higher loan limits; the Department of Housing and Urban Development has released the FHA loan limits for 2020 and they are indeed higher in most areas. The HUD announcement discussing the overall increase in the FHA loan limit for | more...

September 16, 2019

What You Should Know About FHA Home Loan Amounts

By Bruce Reichstein

Do you know what affects your FHA home loan amount? There are factors that the borrower controls such as whether to make the minimum required down payment or pay more down up front; there are also factors that are in the lender wheelhouse such as the amount of the origination fee and other closing costs. Not all of these factors automatically result in a different home loan amount. Some may be required to be paid up front in cash, others may permit financing in whole but not in part. Still, other expenses may not be required of all transactions but may apply to yours. You may find that in some housing markets, a charge or expense that is reasonable and customary may not be common in other housing markets. Some | more...