Whether a first-time buyer, moving up or down in price or even retiring, FHA loans offer affordability and flexibility. On top of that, FHA just increased their loan limits which will allow more buyers to enjoy homeownership. Just like the conforming loan limits’ recent increase, FHA loan limits 2018 have gone up a significant amount. Home price increases make it difficult for some buyers to enter the market. This is especially true in rapidly appreciating areas, but FHA loan increases will help bring more buyers back into the game. By offering more FHA loans to the homebuyer population, it brings that affordability and flexibility to these higher purchase prices. Thus, more prospective buyers that currently rent or live with family can buy a home.
When Do The 2018 FHA Loan Limits Start?
HUD announced on December 7, 2017 through Mortgagee Letter 17-16 that FHA loan limits will increase to keep up with increasing home prices. The new limits are effective with FHA case file numbers assigned on January 1, 2018 or after. You can read the actual Mortgagee Letter here. Keep in mind that this does not mean closings on 1/1/18, but when the case file is actually assigned. FHA loans currently in process or loans under the 2017 loan limits will not be affected by this change.
2018 FHA Loan Limits
As stated in a recent Housingwire.com article, “Back in 2016, the FHA increased loan limits for just 188 counties. Then, in 2017, this number jumped to 2948 counties that saw an increase. And now, the number of counties increased even further to 3,011 counties for 2018.”. The lowest FHA limit for single-family housing has increased to $294,515 compared to $275,665 for 2017. In addition, the high-cost FHA loan limits are increasing. The minimum high-cost limit is increasing from $636,150 to $679,650 for 2018.
2018 FHA Loan Limits for Low & High-Cost Areas
|Area||One Unit||Two Unit||Three Unit||Four Unit|
Keep in mind that in some counties, the amounts vary so always look up your specific county or ask an OVM Financial loan officer.
Looking to Borrow Over FHA Loan Limits?
Although FHA limits will cover many homebuyers, many will want to finance over these amounts. Luckily, there are still great, affordable mortgage options available in this range. For instance, conforming loans now allow for borrowing up to $453,100 for single-family residences while other higher cost areas allow for much higher limits.
Conforming loans have great advantages. For instance, self-employed or commission borrowers may qualify with just one year of tax returns. Additionally, borrowers with student loan debts in income-based repayment (IBR), there are special guidelines to help these borrowers qualify for a mortgage.
If a buyer qualifies for a USDA loan, it is typically the better option because it is no money down and generally cheaper expenses. An OVM loan officer can always compare FHA, USDA, and other potential options for you to see which would be the best fit.
Finally, VA home loans are an amazing option for service members, Veterans, and qualified surviving spouses. Not only do VA loans typically not require a down payment, but there is also no monthly mortgage insurance. Additionally, there is even an opportunity for no VA funding fee for disabled Veterans. VA loan limits are the same as conforming loan limits, but OVM will also allow VA loans up to a $1,000,000 loan size. That is quite a feature, but that doesn’t even touch the surface of the many VA benefits! VA loans make it easier for borrowers to qualify with student loans, higher debt ratios, previous credit issues including foreclosure or bankruptcy, or when just in need of flexible guidelines in general.
Whether you are looking for an FHA or another loan type, just remember to contact an OVM loan officer. Your experienced loan officer and his or her team will provide and explain your mortgage options. Not only do we promise expert, dependable service during your mortgage process, but we also provide service after the closing.