Update: On December 1, 2016, the Department of Housing and Urban Development announced the new and revised FHA loan limits for 2017. Most, but not all, counties in the U.S. will get higher limits in 2017 due to rising home values. We have updated this page to reflect those changes.
According to a HUD press release: In high-cost areas, the FHA national loan limit “ceiling” will increase from $625,500 in 2016, to $636,150 in 2017. Federal housing officials will also raise the “floor” from $271,050 to $275,665. The maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $636,150.
In all U.S. counties, the FHA loan limits either stayed the same or increased from 2016 – 2017. There were no counties with a decrease. Use the links above to find information for your county.
The ‘Floor’ and ‘Ceiling’ Lending Caps
According to the Department of Housing and Urban Development, the maximum FHA lending amount for high-cost metropolitan areas will go up to $636,150 for calendar year 2017. In areas with lower housing costs, the FHA limit can be as low as $275,665. Obviously, there’s a broad spectrum in between.
|Property Size||Low-Cost Area “Floor”||High-Cost Area “Ceiling”|
Note: In this context, a “one unit” property is a standard, single-family home. “Two units” refers to a duplex-style house with two residents living in it, and so on.
These are the “floor” and “ceiling” limits for FHA loans in 2017. In all other areas, “the loan limit shall be set at 115 percent of the median home price [within the county] as determined by HUD.” By design, the maximum FHA lending amounts are intended to be slightly higher than the median home price within a particular area. This makes the program suitable for buyers seeking a modestly priced home.
In most markets, the 2017 limits will give buyers plenty of properties to choose from. But it won’t accommodate those who are shopping on the higher end of the price spectrum — nor is it intended to. The FHA loan program was created to support “low- and moderate-income home buyers,” particularly those with limited cash saved up for a down payment.
How FHA Loan Limits Are Determined
Where do these limits come from? This is one of the most common questions we receive from mortgage shoppers. Here’s a quick overview, starting with the geographical nature of these caps:
FHA loan limits are determined by the county where the home is located, except for properties that are located in metropolitan or “micropolitan” statistical areas. In metro areas, the limits are set using “the county with the highest median home price within the metropolitan statistical area,” according to HUD.
That’s the geographical aspect of it. The maximum lending amounts for this program are based on a percentage of conforming loan limits, which are set by the Federal Housing Finance Agency (FHFA) and are based on home prices. For instance, FHA’s minimum national loan limit “floor” for low-cost areas is typically set at 65% of the national conforming amount for the U.S.
Here’s what home buyers and mortgage shoppers need to know: 2017 FHA limits vary from one county to the next. They are based on the Home Price Index (HPI) and get updated — or at least reviewed — every year. To find the current and complete loan limits for your area, you must first find your county within the PDF documents above. You can also do a database search on the HUD website. Here is the web address for HUD’s mortgage limit lookup tool: https://entp.hud.gov/idapp/html/hicostlook.cfm