The Federal Housing Administration announced that it is increasing its loan limit for most of the country in 2020. The 2020 FHA loan limit will be $331,760—a $17,000 increase from 2019’s loan limit.
In about 70 designated high-cost counties, the FHA’s 2020 loan limit will climb to $765,600—a $40,000 increase from 2019. Alaska, Hawaii, Guam, and the U.S. Virgin Islands will have higher limit ceilings than the rest of the country because of higher construction costs, the FHA says. Those areas will have a 2020 FHA loan limit of $1,148,400.
The FHA says it is raising the loan limit to reflect the increase in home prices.
Eleven counties that didn’t see prices rise will have their loan limits decline in 2020, the FHA says. Some of those counties include Dutchess County, N.Y.; Orange County, N.Y.; and Lincoln County, Idaho. The loan limits there are decreasing by about 50% because of home price changes in the areas.
The FHA is required by law to set single-family loan limits at 115% of median home prices.
View this chart to see the 2020 FHA loan limits.
The FHA’s announcement follows on the heels of the Federal Housing Finance Agency that also approved a higher conforming loan limit for 2020. The cap on loans purchased or acquired by Fannie Mae and Freddie Mac for 2020 will increase to $510,400 and up to $765,600 in high-cost areas.
Also, Veterans Affairs loan caps have been removed for 2020. Active duty military members and veterans may be eligible to qualify for a higher mortgage next year.
Source: magazine
