FHA Loan Limits Set to Drop in High-Cost Markets
The U.S. Department of Housing and Urban Development (HUD) announced last week that standard Federal Housing Administration (FHA) loan limits for areas where housing costs are relatively low will remain unchanged at $271,050 in 2014, but the new ceiling for single-family home mortgages in the highest-cost markets will come down from $729,750 to $625,000, beginning January 1, 2014.
Approximately 650 counties across the U.S., including Dukes and Nantucket counties in Massachusetts, will have lower FHA limits as a result of this change, which is being implemented as emergency measures expire following the higher limits established by the Economic Stimulus Act of 2008. In metropolitan Boston, loan limits for single-family homes in Essex, Middlesex, Norfolk, Plymouth, and Suffolk counties will be reduced from $523,750 to $470,350, and in Worcester County the single family loan limit will be lowered from $385,000 to $285,200. For a chart detailing FHA loan limits for 1-4 Family Homes in all Bay State Counties visit this FHA page on the HUD website.
Last month, Fannie Mae and Freddie Mac’s regulator said it would leave in place the $417,000 conforming loan limit that’s the ceiling for the mortgage giants in most markets, instead of reducing it to take into account home price declines seen in many markets during the bust. Fannie and Freddie will continue to purchase and guarantee mortgages of up to $625,500 in high-cost markets, including parts of California and New York.