The Federal Housing Administration announced Thursday that the FHA loan limits will increase for nearly all of the U.S. in 2020. Like the limit increase for conventional loans that was announced last month by the FHFA, the reason for the increase is due to rising home prices seen in 2019. The new FHA loan limit for most of the country will be $331,760, an increase of 5.38% or nearly $17,000 over 2019’s limit of $314,827.
This new $331,760 limit represents 65% of the national conforming loan limit of $510,400. This amount or floor is for low-cost areas or counties where 115% of the median home price is less than the floor limit. There are approximately 70 "high-cost” counties in the U.S. that have median home prices that are much higher than the FHA loan floor limit, and are therefore considered high-cost areas. These counties have a maximum loan limit ceiling set at 150% of the national conforming limit, or $765,600, an increase of nearly $40,000 over the 2019 limit of $726,525. There are 11 counties where the loan limit is decreasing, and three of those (Dutchess County, New York; Orange County, New York; and Lincoln County, Idaho) the limit is reducing by almost 50%, due to the home price changes in those locations.
If you have questions about how to obtain an FHA loan, contact the experts at NASB at 855-465-0753.