Home / News / Government / FHA Details Loan Limits for FY 2011
Print This Post Print This Post

FHA Details Loan Limits for FY 2011

The ""Federal Housing Administration"":http://ww.fha.gov (FHA) has issued a notice to its approved mortgage lenders outlining the loan limitations it's put in place for fiscal year 2011.
[IMAGE] According to ""Mortgagee Letter 10-40"":http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-40ml.pdf issued by the federal mortgage insurer last week, for forward loans, the limits apply to those that are originated and receive credit approval between January 1, 2011 and September 30, 2011. For reverse loans, or Home Equity Conversion Mortgages (HECMs), the limits are applicable to all loans that have been assigned an FHA case number within the effective date stated above.

To establish the ceiling for fiscal year 2011, FHA used the equation set forth by the Economic Stimulus Act of 2008 (ESA), which calculates the high-cost area threshold at 175 percent of the $417,000 federal conforming loan limit.

[COLUMN_BREAK]

The maximum FHA high-cost area loan limits for fiscal year 2011 are as follows:

* $729,750 for a one-unit property;
* $934,200 for a two-unit property;
* $1,129,250 for a three-unit property;
* $1,403,400 for a four-unit property.

FHA explained that a high cost area or ""ceiling"" is defined as any area where the loan limit may exceed the ""floor."" This bottom-end boundary line is calculated at 65 percent of the national conforming benchmark of $417,000.

The minimum FHA low-cost area loan limits (the ""floor"") for fiscal year 2011 are as follows:

* $271,050 for a one-unit property;
* $347,000 for a two-unit property;
* $419,400 for a three-unit property;
* $521,250 for a four-unit property.

FHA says many areas are eligible for loan limits between the national FHA floor and ceiling based on area median home prices. In addition, loan limits for the special exception areas of Alaska, Hawaii, Guam, and the Virgin Islands are adjusted up to 150 percent of the FHA ceiling to account for higher costs of construction.

The national FHA loan limit for reverse mortgages, or HECMs, in 2011 remains at $625,500 for all areas.

The loan limits are determined by the county in which the property is located.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
x

Check Also

HUD Invests in Small Distressed Communities

HUD has awarded $6 million to the Local Initiatives Support Corporation to provide technical assistance to small distressed communities. Here’s what the grant entails.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.