FHA Increases Home Loan Limits For 2019

Homebuyers looking to purchase a home with a lower down payment have increased buying power in more than 3,000 U.S. counties in 2019.

The Federal Housing Administration (FHA) will increase its floor loan limit from $294,515 to $314,827 on FHA home loans assigned on or after January 1, 2019. In high-cost areas, the new FHA loan limit ceiling will be $726,525, up from $679,650 in 2018. This increase should help homebuyers qualify for a home loan in areas that have seen home prices increase in 2018.

FHA’s 2019 floor loan limit is set at 65% of the national conforming loan limit of $484,350. This floor applies to counties where 115% of the median home price is less than the floor limit. Counties where the loan limit exceeds the floor limit are considered high-cost areas. The FHA sets its maximum loan limit ceiling for high-cost areas at 150% of the national conforming limit.

While FHA forward home loans are popular with first-time homebuyers, the government organization also provides a reverse mortgage program for homeowners aged 62+. The 2019 loan limit for Home Equity Conversion Mortgages (HECM) will be $726,525 from January 1, 2019, up from $675,650 in 2018. The number is based on 150% of the conforming loan limit.

The new HECM limit means that borrowers will now be able to extract more equity from their homes using a reverse mortgage. Additionally, more homeowners may now qualify for a reverse mortgage. The HECM’s stipulation that borrowers must pay off an existing mortgage before obtaining the loan had prevented some borrowers with high mortgage balances from securing enough proceeds to qualify.
- Dec 20, 2018