HUD: New FHA Loan Limit Takes Effect Jan. 1

December 6, 2013
Housing Wire 
mortgage lending news

The standard loan limit on Federal Housing Administration loans for high-cost areas will decline next year to $625,500, down from $729,750. The Housing and Economic Recovery Act of 2008 technically changed the ceiling for pricey markets, but Congress delayed implementation of the standard because of the financial crisis and the slow pace of recovery.

The standard loan limit for low-cost areas is expected to remain at $271,050, and the top for reverse mortgages will stay at $625,500. "Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved," said FHA Commissioner Carol Galante. The rule offers special exemptions that allow counties to obtain loan limits above the national standard when applicable.

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