FHA Loan Limits to Rise in 2020

Housing Finance
The Federal Housing Administration (FHA) has announced its loan limits for 2020.  The nationwide rise in median home prices indicates most buyers across the country will see increases. The FHA floor will increase from $314,827 to $331,760 for single-family home loans. The FHA national low-cost area mortgage limit of $331,760 is set at 65% of the national conforming limit of $510,400. The base limit applies to areas where 115% of the area median home price is less than $331,760. The FHA high-cost ceiling is 150% of the national conforming loan limit and will increase from $726,525 to $765,600 for single-family home loans. High-cost areas are those where 115% of the median home price is greater than the floor ($331,760). In these areas, the limit equals 115% of the median home price up to the FHA ceiling ($765,600). The following table lists the 2020 FHA loan limits for low cost and high cost areas:
Property Size Low Cost Area “Floor” High Cost Area “Ceiling”
One-Unit $331,760 $765,600
Two-Units $424,800 $980,325
Three-Units $513,450 $1,184,925
Four-Units $638,100 $1,472,550
There are 11 counties where the loan limits will decrease from the 2019 levels. The new loan limits will apply to all loans assigned FHA case numbers on or after Jan. 1, 2020. The 2020 FHA loan limits by Metropolitan Statistical Area (MSA) or county can be reviewed on FHA’s loan limits webpage. FHA also increased the loan limits for its Home Equity Conversion Mortgage (HECM), or reverse mortgage program, from $726,525 to $765,600. FHA HECM program regulations do not allow loan limits to vary by MSA or county, so this limit applies to all mortgages regardless of location. For more information, contact Curtis Milton at 800-368-5242 x8597.

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