Industry News

HUD raises real estate loan limits

FHA will now insure mortgages up to $312,895 in high-cost areas

Housing and Urban Development Secretary Alphonso Jackson today announced that the Federal Housing Administration (FHA) has increased its single-family home mortgage limits by more than 7 percent from last year. Effective Jan. 1, 2005, FHA will insure single-family home mortgages up to $172,632 in low-cost areas and up to $312,895 in high-cost areas. The loan limits for two-, three- and four-unit dwellings also increased. The FHA is sending letters to thousands of mortgage lenders and brokers to make them aware of the higher rates that can help families. Last year, the loan limits were $160,176 in low cost-areas and $290,319 in high-cost areas. Five years ago, the limits ranged from just $121,296 to $219,849. These levels were below the cost of many homes in many communities. As a result, families who needed FHA mortgage insurance to qualify to buy a home were effectively locked out of the process. Low-income and first-time home buyers are attracted to FHA-insured loans because ...