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FHA Releases 2016 Loan Limit Data

cash-moneyThe Federal Housing Administration (FHA) revealed its loan limits for 2016, according to an announcement Wednesday.

The FHA said that loan limits will increase in 188 counties from the 2015 limits, but all other counties will remain at their current level.

The increase in loan limits for traditional mortgages is the result of surging home prices, the FHA stated.  The FHA reestablishes loan limits each year based on 115 percent of the median house price in the area.

Click here to view the full list of counties where loan limits will increase.

The announcement said that the FHA's minimum national loan limit "floor" is set at 65 percent of the national conforming loan limit. The floor is applicable to area where 115 percent of the median home price is under 65 percent of the national conforming loan limit.

The 2016 national loan limit "floor" is set to be 65 percent of $417,000, the national conforming loan limit, according to the FHA.

Counties that surpass the "floor" value established by the FHA are considered to be high cost areas.

The FHA's "ceiling" for loan limits in 2016 is set at 150 percent of the national conforming loan limit. This total is $625,500.

Loan limits in high cost metros such as San Francisco, California; Washington, D.C.; New York City; among many more will remain at the national ceiling of $625,500.

Click here to view the full list of counties at the FHA national loan Limit ceiling.

In addition, the FHA also announced that loan limits for FHA-insured reverse mortgages will not change in 2016. The FHA's reverse-mortgage product, called the Home Equity Conversion Mortgage (HECM), will continue to have a maximum claim amount of $625,500.

The loan limits for the reverse mortgage program are based on property value, borrower age, and current interest rates, the FHA said.

The FHA's new loan limits will go into effect January 1, 2016 and will remain in effect through the end of the year.

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