The Department of Housing and Urban Affairs on Friday announced new Federal Housing Administration single-family loan limits
The Department of Housing and Urban Affairs on Friday announced new Federal Housing Administration single-family loan limits. The new limits will take effect Jan. 1.
“As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play,” said FHA Commissioner Carol Galante. “Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved.”
The standard loan limit for areas with relatively low housing costs will stay at its current level, $271,050. However, the limit for areas with the highest housing costs will be reduced by more than $100,000, from $729,000 to $625,500.
The limits were lowered under the Housing and Economic Recovery Act of 2008 (HERA). The higher limits, which have been in place for the last six years, were originally established as an emergency measure to keep mortgage credit available during the housing crisis, according to HUD. The lower limits were originally scheduled to go into effect in 2009, but implementation was delayed several times by Congress due to continuing constraints in the credit market.
Loan limits for FHA-insured reverse mortgages will remain the same at a maximum amount of $625,500, with actual loan limits based on the value of the property, current interest rates and the borrower’s age.
“As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play,” said FHA Commissioner Carol Galante. “Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved.”
The standard loan limit for areas with relatively low housing costs will stay at its current level, $271,050. However, the limit for areas with the highest housing costs will be reduced by more than $100,000, from $729,000 to $625,500.
The limits were lowered under the Housing and Economic Recovery Act of 2008 (HERA). The higher limits, which have been in place for the last six years, were originally established as an emergency measure to keep mortgage credit available during the housing crisis, according to HUD. The lower limits were originally scheduled to go into effect in 2009, but implementation was delayed several times by Congress due to continuing constraints in the credit market.
Loan limits for FHA-insured reverse mortgages will remain the same at a maximum amount of $625,500, with actual loan limits based on the value of the property, current interest rates and the borrower’s age.
