FHA Loan Limits Poised to Increase in 2017

New FHA Loan Limits May Help You Buy a Home

Just before Thanksgiving, the Federal Housing Finance Agency released the conforming FHA loan limits change for 2017. This change resulted in higher loan limits beginning in January for many counties across the country. The FHA has now followed suit. Here is what to know about the FHA Loan Limits changes.

The Federal Housing Administration is insuring loans for people looking to purchase a home or refinance a home with a little equity. The program insures loans up to the maximum loan limit in the county in which the property is located. Using Sonoma Sounty, California, as an example, the maximum loan limit for 2016 was $554,600. This number is rising to $595,600 for 2017. This represents a significant change for people looking to purchase a home who have good income, sufficient credit, and a healthy debt-to-income ratio who are otherwise tight on cash to close. This applies to a home buyer by allowing them to purchase up to $615,000 in the county of Sonoma with just 3.5% down. This change represents bigger borrowing power in nearly every county across the United States.

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FHA Loan Limits to Increase in 2017

Good news comes in all forms during the Christmas season and potential home buyers got some good news this month when the Federal Housing Administration (FHA) announced the agency’s new schedule of loan limits. Due to an increase in housing prices here in the Southern San Joaquin Valley and most of the rest of the country the FHA will offer a slight increase in loan limits on home loans assigned on or after Jan. 1, 2017 and will remain in effect through the end of the year.

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FHA to Increase Loan Limits for 2017

The Federal Housing Administration has announced that it will increase its loan limits in 2017 to keep pace with rising home prices.

The FHA announced that most areas off the country would see “a slight increase” in loan limits for next year. In high-cost areas, the FHA’s loan limit ceiling will rise from $625,500 to $636,150. FHA is also increasing its “floor” from $271,050 to $275,665.

The maximum claim amount for FHA-insured Home Equity Conversion Mortgages will also increase to $636,150, an amount which is 150% of the national conforming limit of $424,100.

According to the FHA, increases to its floor and ceiling limits mean that the maximum loan limit for forward mortgages will increase in 2,948 counties. The limit will remain unchanged in only 286 counties, and no counties will see a decrease in maximum loan limits for 2017.

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