The Federal Housing Administration (FHA) has announced the agency’s new schedule of loan limits for 2016. These loan limits are effective for case numbers assigned on or after Jan. 1, 2016, and will remain in effect through the end of the year.

Due to changes in housing prices, the maximum loan limits for forward mortgages increased in 188 counties.  There were no areas with a decrease in the maximum loan limits for forward mortgages.

Each year, FHA recalculates its loan limits based on 115 percent of the median house price in the area. For counties, or equivalent, located in Metropolitan Statistical Areas (MSAs) the limit for all areas in the MSA is calculated based on the highest cost county.

There is no change to the FHA national loan limit “ceiling” which remains at $625,500 and the “floor” which remains at $271,050.   FHA’s minimum national loan limit “floor” is set at 65 percent of the national conforming loan limit of $417,000. The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit.

Any area where the loan limit exceeds the “floor” is considered a high cost area. The maximum FHA loan limit “ceiling” for high cost areas is 150 percent of the national conforming limit.
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