FHA Limits to Increase in 188 Counties

Loan limits for the Federal Housing Administration mortgage insurance program in 2016 will rise in 188 counties across the nation where home prices increased.

In all other counties, the loan limits are unchanged. The FHA ceiling for forward mortgages it insures remains at $625,500 and its floor remains at $271,050. For the Home Equity Conversion Mortgage program, the limit nationwide remains at $625,500 as well.

FHA limits vary from county to county. Each year, FHA recalculates its loan limits based on 115% of the median house price in the area. No county had a decrease in the forward mortgage maximum amount.

The floor is set at 65% of the conforming loan limit of $417,000. It applies to those areas where 115% of the median home price is less than 65% of the conforming loan limit. Any area where the loan limit exceeds the floor is considered a high-cost area.

The ceiling and floor remained the same in 2015 from 2014, but 187 counties had a higher limit at the start of this year.

The new limits will apply to loan files receiving case numbers starting Jan. 1, 2016.

Conforming loan limits remain the same for 2016 except in 39 high-cost counties, the Federal Housing Finance Agency announced on Nov. 25.