The Federal Housing Administration (FHA) has increased mortgage loan limits in 3,053 counties across the United States this year. The FHA action follows a similar move by the Federal Housing Finance Agency (FHFA), which recently raised loan limits for conventional loans.
In high-cost housing markets such as the Washington region, FHA loan limits rose to $726,525 as of Jan. 1, matching the limit for conventional loans acquired by Fannie Mae and Freddie Mac for one-unit properties. The increase is a big jump over 2018’s FHA loan limit in high-cost markets of $679,650. Limits are higher for properties with more than one unit.
The FHA, which insures loans and requires borrowers to pay both upfront and monthly mortgage insurance, is popular with first-time buyers and borrowers with credit challenges since its loan guidelines are a little looser than conventional loan guidelines and the program requires a lower down payment.
The higher loan limit means that more home buyers in high-cost markets — including New York, San Francisco and Los Angeles — can finance a more expensive home without needing a jumbo loan, which generally has tighter loan approval guidelines and requires a larger down payment.
FHA loans require a down payment of 3.5 percent.
In most counties, the maximum FHA loan amount is now $314,827.
To check loan limits around the nation, click here.