2017 FHA Loan Limits Announced
HUD announced today updated loan limits for the FHA loan program that will take effect for all FHA Case numbers created on or after January 1, 2017
As with the recent announcement on conventional loan limits, HUD has implemented maximum loan amount increases in 2,948 counties across the country, with only 286 counties having the same loan limits as 2016. There were no counties in the country with decreased loan limits for the new year.
To search for your state/county loan limit for 2017 click here (Use the dropdowns, and remember to change the "Limit Year" to 'CY2017')
For those curious why an area didn't see more of an increase or wondering why their county loan limit is lower than they'd expect, it's important to remember what the FHA program is. FHA is intended to offer a low down payment option mortgage with competitive rates to low and moderate income borrowers. They also serve niches such as the $100 down HUD owned program, the 203k renovation loan, and disaster relief mortgage products. The program is not meant to be a primary means of financing for expensive homes or high income borrowers (though in many high cost areas, the program serves this demographic).
The "ceiling" for FHA loans nationwide is set at 150% of the national median home value - for 2017, this calculation results in a maximum FHA loan amount of $636,150. The "floor" for FHA loans is calculated using 65% of the national median home value, and for 2017, results in a minimum loan limit of $275,665.
If you live in a very expensive area of the country (San Francisco, for example) you can expect to finance up to the program maximum for "high cost" areas, where other counties throughout the country have varying loan limits based on local median home prices. Throughout the country, though, the FHA loan limit will fall somewhere between the floor & ceiling - you can use the lookup tool to see where your local market falls.
For real estate agents, it's important to note that these changes are in effect not for loans closed in 2017, but for case numbers created and assigned in 2017 - so if you have a client that will benefit from the FHA loan limit increases, it's important if you go under contract before January 1, to ensure the lender does not pull the FHA case number until after January 1. If your clients are impacted, they'll surely appreciate your saving them upwards of $11,000 in high cost areas or $4500 in low cost areas by increases the maximum they can finance.