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When the FHA/HUD official site announced FHA mortgage loan guaranty limits for 2017, it quickly followed up the original announcement with some important corrections. However, the makes no changes to FHA loan limits, including those in the special exception areas.

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FHA Loan Articles

News and Updates for Homeowners

FHA Updates Loan Limits for 2017

FHA Updates Loan Limits for 2017
February 27, 2017 - When the FHA/HUD official site announced FHA mortgage loan guaranty limits for 2017, it quickly followed up the original announcement with some important corrections.

According to FHA mortgagee letter 2016-25, the original announcement “...set Federal Housing Administration forward mortgage limits for calendar year 2017, but indicated incorrect ceiling limits for Alaska, Hawaii, Guam, and the Virgin Islands, which are special exception areas which allow for higher construction costs.”

The FHA/HUD update includes “correct forward mortgage limit ceiling for those special exception areas” which are described below for single-unit properties as well as multiple unit purchases.

It is very important to note that even with the updated information (see below) there are no changes to FHA loan limits, including those in the special exception areas.

“While ML 16-20 referenced incorrect ceiling limits for the special exception areas, there are no changes to the mortgage limits in any jurisdiction, including the special exception areas, as no jurisdiction in the special exception area has a median house price that generates a mortgage limit above the amounts referenced in ML 16-20.”

What is different, according to the new mortgagee letter?

According to the FHA official site, elevated construction expenses in the special exception areas require adjustments to mortgage limit ceilings for Alaska (AK), Hawaii (HI), Guam (GU) and the Virgin Islands (VI).

“These Special Exception Area limit ceilings are set at 150 percent of FHA’s High Cost Area mortgage limits, rounded down to the nearest $25” according to the official site. These four special exception areas have a higher ceiling as follows:
  • One-unit: $954,225
  • Two-unit: $1,221,750
  • Three-unit: $1,476,775
  • Four-unit: $1,835,200
This correction applies for all affected FHA loans in the special exception area with FHA case numbers assigned on or after 1 January, 2017.

If you aren’t sure how this updates might affect your current transaction, speak to a loan officer, but make sure you have the date of your FHA loan case number assignment available if possible.
Those who do not yet have an FHA loan case number, and receive on on or after 1 January, 2017, would likely be affected by the update assuming the loan is for a property located in one of the Special Exception Areas.

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