FHA loan limits

As part of the late 2007 Economic Stimulus Package, the FHA was ordered to revise its conforming loan limits. The new FHA loan limits were released on March 6, 2008.

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Old FHA Loan Limits
Under the old system, FHA loans could be issued for a maximum of $362,790. These limits excluded homebuyers in high cost areas. In addition, the limit for all Government-Sponsored Enterprises was $417,000, which meant that Fannie Mae and Freddie Mac couldn't buy mortgages valued at more than that.

These limits affected interest rates for all home loans. Conforming loans, those under $417,000, were often 2-3 percentage points lower than Jumbo loans.

New FHA Loan Limits
For the period between March 6, 2008 and December 31, 2008, new FHA limits are in effect. Rather than one standard for all regions, FHA limits are now geographically set.

The maximum is 125% of area median home prices, within a minimum of $271,050 and a maximum of $729,750. This helps ensure that buyers in high-value metropolitan areas benefit from the new limits.

To determine your local loan limit, use the HUD loan limit lookup tool. You can also use the Bills.com Know Your Limits program. Simply complete a home loan request to have your local limit and a list of lenders emailed to you.