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.
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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.