In high-cost areas across the United States, FHA’s loan limit “ceiling” was increased from $636,150 in 2017, up to $679,650 for 2018. The housing agency also increased its “floor” from $275,665 to $294,515. Additionally, the National Mortgage Limit for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will rise from $636,150 to $679,650. These changes are the result of rising home values.
Overview of 2018 FHA Loan Limits
Below you will find the 2018 FHA loan limits for low-cost areas, high-cost areas, and special exceptions for areas like Alaska and Hawaii with expensive construction costs.
How FHA Loan Limits Are Determined
Where do these limits come from? This is one of the most common questions we receive from mortgage shoppers. Here’s a quick overview, starting with the geographical nature of these caps:
FHA loan limits are determined by the county where the home is located, except for properties that are located in metropolitan or “micropolitan” statistical areas. In metro areas, the limits are set using “the county with the highest median home price within the metropolitan statistical area,” according to HUD.
That’s the geographical aspect of it. The maximum lending amounts for this program are based on a percentage of conforming loan limits, which are set by the Federal Housing Finance Agency (FHFA) and are based on home prices. For instance, FHA’s minimum national loan limit “floor” for low-cost areas is typically set at 65% of the national conforming amount for the U.S.
Here’s what home buyers and mortgage shoppers need to know: 2018 FHA limits vary from one county to the next. They are based on the Home Price Index (HPI) and get updated — or at least reviewed — every year. To find the current and complete loan limits for your area, you must first find your county within the PDF documents above.
The FHA’s loan limits for high-cost areas (with comparatively high home prices) are set at 150% of the national conforming cap of $453,100. This results in the following maximum amounts:
- One-unit: $679,650
- Two-unit: $870,225
- Three-unit: $1,051,875
- Four-unit: $1,307,175
The FHA’s national low-cost area mortgage limits for 2018 are set at 65% of the national conforming limit of $453,100 (for a one-unit property). Here are the specific amounts for this category, by property type:
- One-unit: $294,515
- Two-unit: $377,075
- Three-unit: $455,800
- Four-unit: $566,425
High- and Low-end Lending Caps
According to the Department of Housing and Urban Development, the maximum FHA lending amount for high-cost metropolitan areas rose to $679,650 for calendar year 2018. In areas with lower housing costs, the FHA limit can be as low as $294,515. Obviously, there’s a broad spectrum in between.
These are the “floor” and “ceiling” limits for FHA loans in 2018. In all other areas, loan limits are typically set at 115% of the median home price for the county, as determined by HUD. By design, the maximum FHA lending amounts are intended to be slightly higher than the median home price within a particular area. This makes the program suitable for buyers seeking a modestly priced home.
In most real estate markets, the 2018 limits should give buyers plenty of properties to choose from. But it won’t accommodate those who are shopping on the higher end of the price spectrum — nor is it intended to. The FHA loan program was created to support “low- and moderate-income home buyers,” particularly those with limited cash saved for a down payment.
Guam, Virgin Islands, Alaska, and Hawaii
“Special exception” areas are places that have higher construction costs. These areas include Alaska, Hawaii, Guam, and the Virgin Islands. In 2018, these four special-exception areas have a higher FHA loan limit ceiling, as shown below:
- One-unit: $1,019,475
- Two-unit: $1,305,325
- Three-unit: $1,577,800
- Four-unit: $1,960,750
FHA Loan Limits for 2018: Maximum Mortgage Amount by County is available in the following areas/cities
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