WASHINGTON – Dec. 9, 2013 – The Department of Housing and Urban Development (HUD) announced new FHA single-family loan limits effective Jan. 1, 2014.
The current standard loan limit (cap) for areas with relatively low housing costs will remain unchanged at $271,050.
However, the new national-ceiling loan limit for the highest cost areas will be reduced from $729,750 to $625,500.
The caps for two, three and four units also changed:
• Two units: $347,000 (low-cost area cap) and $800,775 (high-cost area cap)
• Three units: $419,425 (low-cost) and $967,950 (high-cost)
• Four units: $521,250 (low-cost) and $1,202,925 (high-cost)
All new rates are effective from Jan. 1 to Dec. 31, 2014.
“As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play,” says 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.”
Higher FHA limits have been in place for six years and established by the Economic Stimulus Act of 2008 as emergency measures to assure that mortgage credit was widely available during a time when private lending options were severely constrained. The lower loan limits were originally scheduled to take effect in January 2009, but Congress delayed implementation several times.
The mortgage loan limits for FHA-insured reverse mortgages will remain unchanged. The FHA reverse-mortgage product, known as the Home Equity Conversion Mortgage (HECM), will continue to have a maximum claim amount of $625,500, with actual loan limits based on property value, borrower age and current interest rates.
© 2013 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.