Last week, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac single family loan limits would be increasing in at least 46 counties around the country where median home prices were already at $417,000 or higher (or high-cost areas).
In Lender Letter LL-2014-08, Fannie Mae provides information relative to these new loan limits and has assured lenders that loan case files submitted to Desktop Underwriter (DU) on or after January 1, 2015 will be subject to the 2015 loan limits. Links are provided in this Lender Letter for anyone interested in obtaining the specific loan limit for each of the high-cost areas.
It should be noted that the “General” loan limits for 2015 remain unchanged from 2014 – for areas not designated as “High-Cost” areas. For example, the loan limit for a one-unit dwelling in an area not considered to be High-Cost will remain at $417,000 (except for properties in Alaska, Guam, Hawaii and the U.S. Virgin Islands which will be $625,500).
This week, look for HUD/FHA to issue a Mortgagee Letter that will outline the FHA maximum mortgage limits for transactions that obtain FHA Case Numbers on or after January 1, 2015.
If you remember, last year FHA actually decreased its loan limits in certain areas. FHA typically designates areas as either “Low Cost Areas” or “High Cost Areas”. In 2014, the Low Cost Area “Floor” was $271,050 and the High Cost Area “Ceiling” was $625,500. It is anticipated that, based on an analysis of median home prices, FHA will raise its maximum forward mortgage limits in many of the areas whose limits were reduced last year.
The date of HUD’s Mortgagee Letter (2013-43) that announced the 2014 FHA mortgage limits was December 6, 2013. As a result, it is recommended that lenders check the www.fha.gov website each day this week and next if they are interested in obtaining the 2015 FHA mortgage limits first-hand.
Industry groups who are not satisfied with the new limits will typically have an opportunity to provide data for HUD to reconsider the loan limits in certain areas. These procedures will likely be outlined in the Mortgagee Letter that will be published. However, there is typically a short time frame for industry groups to compile this data and forward it to HUD for consideration.
So, keep checking the HUD website outlined above for this information and, within the next 10 days, lenders should have knowledge of all of the 2015 nationwide single family loan limits for the GSE’s and FHA.