Industry News
September 20, 2011
HUD Issues Mortgage Letter on FHA Loan Limits
The U.S. Department of Housing and Urban Development (HUD) recently announced changes to the loan amounts for Federal Housing Administration (FHA)-insured loans. The changes will be effective October 1, 2011 through the end of the year as noted in Mortgagee Letter 2011-29. If legislation is enacted to extend the current FHA-insured loan limits which expire on Sept. 30, HUD said it will publish a Mortgagee Letter defining the most recent loan limits for both FHA-insured Forward Mortgages and Home Equity Conversion Mortgages (HECMs).
For forward mortgage loans in non-high-cost areas, the loan limit for a one unit home remains at $271,050, and in high-cost areas, the loan limit for a one unit home will lower from $729,750 to $625,500 (i.e., from 175 percent of the Freddie Mac conforming loan limit of $417,000 to 150 percent of such amount). However, in a high-cost area, the maximum loan amount may not exceed 115 percent of the median home price, and thus, the loan limit may be less than $625,500. An attachment to the Mortgagee Letter provides the maximum loan amount for high cost areas in which the loan limit is more than $271,050 but less than $625,500.
