In light of the rising home prices that affected housing demand nationwide, FHA has announced an increase in loan limits for the year 2017. This new rule will be felt in 2,948 counties while 286 counties will sustain the same limits as in 2016. It affects both forward and reverse mortgages and will take effect on January 1st.
Change in Forward Mortgage Limits
In its December 1 report, the Federal Housing Administration (FHA) announces the following increases:
- $636,150 in 2017 from 2016’s $625,500 for high-cost counties
- $275,665 in 2017 from 2016’s $271,050 for low-cost counties
The following table shows the FHA loan limits for both low and high-cost areas by property type:
Change in Reverse Mortgage Limits
For eligible seniors, you can now borrow up to $636,150 in 2017 for the Home Equity Conversion Mortgage (HECM) program. The current limit is at $625,500.
Are there any exceptions?
Accounting for the higher cost of construction in these areas, the FHA adjusted the loan limits as well for forward mortgages in Alaska, Guam, Hawaii, and the Virgin Islands. The adjusted limits for said locations are as follows:
- $721,050 for one-unit homes
- $923,050 for two-unit homes
- $1,115,800 for three-unit homes
- $1,386,650 for four-unit homes
The same loan limit adjustment for reverse mortgages applies to these areas.
The FHA offers one of the best mortgageprograms out there. With only a 3.5 percent requirement in down payment, it gives an affordable option for millions of Americans looking to own a home. However, the rising home prices pose a contradiction to this objective, hence the adjustment. If you want to know if there has been an adjustment for your area, you can use the HUD’s FHA Mortgage Limits search tool here.