On Nov. 26, HUD FHA issued loan limits for single family programs.
HUD reported FHA issued new loan limits for single-family Title II forward and Home equity conversion mortgages (HECMs) for 2025; limits will increase in coming year.
This loan limits increase is a result of the strong home price appreciation in 2024.
Background
Pursuant to National Housing Act (NHA) (12 USC 13), FHA sets single-family forward mortgage loan limits at 115% of area median house prices, subject to floor and ceiling.
FHA calculates forward mortgage limits by Metropolitan statistical area (MSA)/county.
NHA required FHA to establish floor and ceiling loan limits based on the loan limit set by the FHFA for conventional mortgages owned or guaranteed by Fannie and Freddie.
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.
Forward Mortgage Limits
Mortgagee Letter 2024-21 defined national mortgage limits for low-cost areas as $524,225 for 1-unit, $671,200 for 2-unit, $811,275 for 3-unit, $1,008,300 for 4-unit.
Low-cost area mortgage limits are set at 65% of the national CLL of $806,500.
Mortgage limits for high-cost areas are $1,209,750 for 1-unit, $1,548,975 for 2-unit.
$1,872,225 for 3-unit and $2,326,875 for 4-unit (150% of national CLL of $806,500).
Further, mortgage limits for special exception areas of Alaska, Hawaii, Guam, and the US Virgin Islands are adjusted by the FHA to account for higher costs of construction.
Due to this, these four special exception areas have a higher ceiling, $1,814,625 for a 1-unit, $2,323,450 for 2-unit, $2,808,325 for 3-unit, and $3,490,300 for a 4-unit.
HECM Limits
Letter 2024-22 increased the Maximum claim amount (MCA) to $1,209,750 for 2025.
Applicable to all areas, including special exception areas, ALSK, HWI, GUAM, US VI.
Effectiveness
The new loan limits are effective for FHA case numbers assigned on/after Jan. 1, 2025.
