HUD raises FHA loan limits across the U.S.
February 26 2018
As of January 1, the Department of Housing and Urban Development raised FHA loan limits in more than 3,000 counties across the United States. This is great news for prospective homebuyers because they can now borrow greater amounts than ever before, meaning their dream homes could be within reach.
What are the new limits?
The new loan limit maximum increased 6.4 percent, going from $636,150 to $679,650 in high-cost counties. That means potential homebuyers applying for an FHA loan have an extra $43,500 to borrow if they need it. The loan limit minimum rose as well, from $275,665 to $294,515. The FHA calculates mortgage limits by Metropolitan Statistical Area (MSA) and county. The loan limit for the Chicago-Naperville-Elgin MSA, for example, is $365,700 for a single-family home.
Why did the FHA increase the limits?
The National Housing Act requires the FHA to set loan limits to 115 percent of median home prices for single-family homes. And since home prices have been consistently increasing, the loan limits have followed suit.
How does it benefit prospective homebuyers?
Higher loan limits means more options for buyers and the opportunity to buy in areas they might not have otherwise qualified for. It also means buyers who don't have the best credit or biggest down payment may still be able to buy a home.
Interested in learning more about FHA loans? Contact us today!