FHA Mortgage Limits to Remain the Same – except 188 Counties

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HUD/FHA announced that their FHA maximum mortgage limits will remain the same in 2016, in a press release dated December 9, 2015.  There will be no change in the national loan limit “ceiling” of $625,500 or the “floor” of $271,050.

This announcement will end all speculation that the FHA ceiling and/or floor would be increasing due to rising home prices around the country.  However, in my opinion, the current FHA maximum mortgage limits are quite adequate and are very competitive with the GSE limits.

I am not aware of any recently published complaints about prospective homebuyers being unable to purchase a home with FHA insured financing because the maximum mortgage limit was not sufficient.  This may become an issue in places like California and New York if the maximum limit remains at $625,500 in future years. But, buyers of properties in this price range typically obtain conventional financing.

The “good news” with HUD’s announcement is that there will be no counties that will have their FHA mortgage limits decreased (yes – this has happened before in the not too distant past) and there are a total of 188 counties that will see an increase in their FHA mortgage limits (somewhere between the floor and the ceiling) beginning on January 1, 2016.

As expected, the Home Equity Conversion Mortgage (HECM) maximum claim amount will remain at $625,500.

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For a complete listing of FHA maximum mortgage limits nationwide go to the following link:   www.fha.gov – then click on “Press Room” & “Press Releases” to read the December 9th Announcement which contains a link to the mortgage limits page.

About the Author

Gerry Glavey

Gerard (Gerry) Glavey is Senior Vice President / Chief Credit Officer for LoanLogics. Gerry has decades of experience working in residential mortgage credit and compliance and brings insights that few in the industry can match. In his role, he develops new services and provides support for all post close quality control and quality assurance, pre-close quality control, due diligence services, and document processing services. He spent 37 years with the US Department of Housing and Urban Development, where most recently he was the Director, Processing and Underwriting Division for the Home Ownership Center (HOC) in Philadelphia. In this capacity, Mr. Glavey was responsible for the administration of all HUD/FHA Single Family Loan Origination activities, including underwriting, appraisal and endorsement for the 16 state jurisdiction of this HOC.