HUD raises FHA loan limits for the new year
February 14th, 2006HUD has updated the Federal Housing Administration’s (FHA) single-family mortgage limits as a result of increases in the Freddie Mac mortgage loan limits. As you may know, the National Housing Act provides that the mortgage limit for any given area shall be set at 95% of the median house price in that area, as determined by HUD, except that the FHA mortgage limit in any given area cannot exceed 87% of the Freddie Mac loan limit, nor be lower than 48% of the Freddie Mac loan limit for a residence of applicable size. (Gotta love government speak)
In areas where 95% of the median house price is less than 48% of the Freddie Mac limit, the FHA limits are set at the 48% amount, i.e., the “floor,” as follows:
One-Unit $200,160
Two-Unit $256,248
Three-Unit $309,744
Four-Unit $384,936
Any area where the limits exceed the floor is known as a “high cost” area. In areas where 95% of the median house price exceeds the 87% figure, the mortgage limits are set at the 87% amount, i.e., the “ceiling,” as follows:
One-Unit $362,790
Two-Unit $464,449
Three-Unit $561,411
Four-Unit $697,696
For all other areas, i.e., those where 95% of the median home price for the area is in between the floor and the ceiling, the limit shall be at 95% of the median home price.
A complete schedule of FHA mortgage limits for all areas is available through the Internet at https://entp.hud.gov/idapp/html/hicostlook.cfm
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