Standard FHA loan limits for areas where housing costs are relatively low will remain unchanged at $271,050 in 2014, but the new ceiling for the highest-cost areas will come down from $729,750 to $625,500 on Jan. 1,  the Department of Housing and Urban Development announced today.

“As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play,” said FHA Commissioner Carol Galante in a statement. “Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved.”

Approximately 650 counties will have lower FHA limits as a result of this change, which is being implemented as higher limits established by the Economic Stimulus Act of 2008 as emergency measures expire.

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.

More details on the new FHA limits, including county limits, are available at HUD.gov.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription