FHA announces new single family loan limits for 2021
WASHINGTON – The Federal Housing Administration (FHA) announced on December 2nd the agency’s new schedule of loan limits for calendar year 2021 for its Single Family Title II forward and Home Equity Conversion (reverse) Mortgage insurance programs. Loan limits for most of the country will increase in the coming year resulting from robust house price appreciation, which is factored into the statutorily mandated calculations FHA uses as part of its methodology for determining the limits each year. The new loan limits are effective for FHA case numbers assigned on or after January 1, 2021.
In high-cost areas of the country, FHA’s loan limit ceiling will increase to $822,375 from $765,600. The new loan limit for a single-family unit in King, Pierce and Snohomish counties of Washington is $776,250.
FHA will also increase its floor to $356,362 from $331,760. Additionally, the FHA-insured Home Equity Conversion Mortgage (HECM) maximum claim amount (HECM limits) for reverse mortgages will increase to $822,375 from $765,600. FHA’s current HECM regulations do not allow the HECM limit to vary by MSA or county; instead, the single HECM limit applies to all HECMs regardless of where the property is located.
FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008 (HERA), to set Single Family forward loan limits at 115 percent of area median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county.