WASHINGTON (12/11/15)--The Federal Housing Administration (FHA) announced Thursday its new schedule of loan limits for 2016. These limits are effective for all loans purchased on or after Jan. 1, 2016, through the end of 2016.
Due to changes in housing prices, the maximum loan limits for forward mortgages increased in 188 counties from 2015. There were no areas with a decrease in the maximum loan limits for forward mortgages.
The FHA recalculates its loan limits based on 115% of the median house price in the area. For counties, or equivalent, located in Metropolitan Statistical Areas (MSAs) the limit for all areas in the MSA is calculated based on the highest cost county.
There are no changes to the FHA national loan limit “ceiling” which remains at $625,500 and the “floor” which remains at $271,050. The floor is set at 65% of the national conforming loan limit of $417,000 and applies to those areas where 115% of the median home price is less than 65% of the national conforming loan limit.
Any area where the loan limit exceeds the floor is considered a high cost area. The maximum FHA loan limit ceiling for high cost areas is 150% of the national conforming limit.
Additional information and loan limit adjustments for two-, three- and four-unit properties, and in Special Exception Areas, are noted in FHA's mortgagee letter.