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The FHA has announced increased FHA loan limits for 2018. The higher limits affect FHA home loan transactions in high-cost areas, low-cost housing markets, and gives qualified applicants more borrowing power in typically-priced housing markets, too.

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FHA Home Loan Limits for 2018

FHA Home Loan Limits for 2018
December 5, 2017 - The FHA has announced increased FHA loan limits for 2018. The higher limits affect FHA home loan transactions in high-cost areas, low-cost housing markets, and gives qualified applicants more borrowing power in typically-priced housing markets, too.

The national conforming loan limit for 2018 is set at $453,100, up from last year's limit of $424,100 (see below). According to the FHA official site (FHA.gov), the Federal Housing Administration calculates "forward mortgage limits based on the median house prices in accordance with the National Housing Act. FHA’s Single Family forward mortgage limits are set by Metropolitan Statistical Area (MSA) and county”. Loan limits are published each year and updated annually as conditions warrant.

The higher FHA loan limits in 2018 come due to “robust increases in median housing prices and required changes to FHA's floor and ceiling limits, which are tied to the Federal Housing Finance Agency (FHFA)'s increase in the conventional mortgage loan limit for 2018” according to a press release on the FHA official site. More than three thousand counties will see FHA loan limits increase in 2018.

The FHA sets loan limits "at or between the low cost area and high cost area limits" based on the median house prices for the area.

FHA Loan Limits for Homes Sold in Low-Cost Areas

According to the FHA official site, the FHA loan “floor” applies to those areas where “115 percent of the median home price is less than 65 percent of the national conforming loan limit."

For FHA loans in 2018 the FHA national low cost area mortgage limits are set at 65 percent of a national conforming limit of $453,100 for a single-unit home. That means FHA loan limits in 2018 are as follows in low-cost areas:
  • One-unit: $294,515
  • Two-unit: $377,075
  • Three-unit: $455,800
  • Four-unit: $566,425
FHA Loan Limits for High-Cost Areas

The FHA loan limits "ceiling" for high cost areas in 2018 is derived from a calculation based on 150% of the national conforming loan limit of $453,100 for a one-unit property:
  • One-unit: $679,650
  • Two-unit: $870,225
  • Three-unit: $1,051,875
  • Four-unit: $1,307,175
FHA Loan Limits for Special Exception Areas: Alaska, Guam, Hawaii, The Virgin Islands

Due to higher construction costs in certain markets, FHA loan limits get calculated differently for "special exception" areas. These exception areas include Alaska, Hawaii, Guam, and the Virgin Islands. In 2018, the FHA loan limit for these areas are as follows:
  • One-unit: $1,019,475
  • Two-unit: $1,305,325
  • Three-unit: $1,577,800
  • Four-unit: $1,960,750
The FHA loan limits seen here apply for all FHA loans with case numbers assigned on or after January 1, 2018.

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