Higher FHA Loan Limits for 2019

Highlights

  • FHA announced new loan limits for 2019.
  • The new limits increased and FHA's nationwide floor level is $314,827.
  • FHA loan top limits,, except for special areas, are $726,525.
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Maximum FHA Loan Amounts - Higher Loan Limits for 2019

FHA loans are a popular choice, especially for buyers with low credit scores and low down-payment (or high loan-to-value ratios). The Housing and Urban Development Department (HUD) announced in December 2018 an increase in FHA mortgage loan limits for 2019. 

Similar to Fannie Mae and Freddie Mac conforming loan limits, the FHA Loan Limits are based on:

  • The number of units: from single-unit to four-unit properties
  • Geographical location: Based on counties

Based on rising median home prices, the lower and higher limits increased by 6.9% in 2019. Here are the limits compared to 2018. The HUD announced these changes:

FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008 (HERA), to set Single Family forward loan limits at 115 percent of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county.
In high-cost areas of the country, FHA’s loan limit ceiling will increase to $726,525 from $679,650. FHA will also increase its floor to $314,827 from $294,515. Additionally, the National Mortgage Limit for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $726,525 from $679,650.

Here are the new FHA 2019 Loan Limits for a Single Family Home compared to 2018 limits.

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Single Family FHA Loan Limits 2019

FHA’s maximum loan limits (PDF) for a single-family house are broken down into four categories as follows:

Low-Cost Area (Floor) FHA Loan Limit: $314,827

The maximum allowable FHA loan is not less than $314,827 which is 65% of the Fannie Mae and Freddie Mac conforming loan limit, currently at $484,350. The vast majority, 2,657 or 82% of the counties have the lowest level maximum loan limit. 

High-Cost Area (Ceiling) FHA Loan Limit: $729,750

The maximum FHA loan limit in the Continental United States is still at $726,725, which is identical to Fannie Mae and Freddie Mac"s High Cost conforming loan limit. Only 73 counties are at the ceiling level. 

Areas between the Floor and the Ceiling: Between $314,827 and  $729,750

The remaining 502 counties have FHA loan limits between the ceiling and the floor.

Special FHA Loan Limit Exceptions for Alaska, Hawaii, Guam, and the Virgin Islands: $1,089,787

Those four areas have special higher limits. These limits are identical to Fannie Mae and Freddie Mac’s conforming loan limits for these areas.

Tip: If you want to find the FHA limit for your area, check out the FHA’s Web site with updated 2019 FHA Loan Amounts for all of the counties.

FHA Loan Limits 2019: Sample Mortgage Payments

The FHA loan limits are based on housing prices for each county. That means that most people should be able to get an FHA mortgage or conventional loan based on today’s FHA loan limits and Fannie Mae and Freddie Mac’s conforming loan limits.

The table below shows the maximum FHA loan for three different areas (the actual places are just an illustration), the amount of house you can buy, and your mortgage payments (principal, interest and mortgage insurance).

Here are the underlying assumptions:

  • Mortgage: A 30-year FHA loan at 4.9%.
  • Down-payment: 3.5%
  • Monthly Mortgage Insurance: 0.85% for loan less than $625,000 (and LTV over 95%) and 1.05% for loans greater than $625,000 (and LTV over 95%)
  • Upfront Mortage Insurance premium of 1.75% not rolled into loan.
  • Note: The Monthly Mortgage Insurance payment decreases each year, but under the following examples remains for the full duration of the loan.

 

Name of Place Area Mortgage-Sum   House Value Mortgage Payment (Principal and Interest) Mortgage Insurance Upfront Mortgage Insurance
All of Alabama Low Cost Area $314,827 $326,426 $1,671 $223 $5,509
Cannon, TN Between Loan and High-Cost Areas $534,750 $554,145 $2,838 $379 $9,358
Santa Barbara, CA High Cost Area $726,525 $752,876 $3,856 $515 $12,714

The FHA loan limits are in line with conventional loan mortgage program. FHA's less strict credit score requirements and low down payment requirements make it an attractive option for many first-time home buyers. 

When shopping for your mortgage loan, check mortgage rates and mortgage fees, including lender fees and third-party fees. FHA rates are often less, but then make sure to include mortgage insurance premiums in your calculations.

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Shopping for a mortgage loan? Low credit score? Look into an FHA loan! Great credit qualifications – look into a conventional loan. Make sure to get a mortgage quote from a Bills.com mortgage provider.

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