FHA
The Federal Housing Administration (“FHA”) has released Mortgagee Letter 2019-19 which provides the new maximum loan limits applicable to FHA-insured Title II forward mortgages. The new loan limits are effective for case numbers assigned on or after January 1, 2020, through December 31, 2020.
The FHA reported that due to rising home prices, the maximum loan limits for FHA forward mortgage will rise for nearly all U.S. counties. For these forward mortgage limits the FHA will increase the loan limit “floor” from $314,824 to $331,760 for one-unit properties. This figure is equal to 65% of the national conforming loan limit of $510,400, recently announced by the Federal Housing Finance Agency. The loan limit “ceiling” will also increase in high costs areas from $726,525 to $765,600. This “ceiling” amount is equal to 150% of the national conforming limit.
The calendar year 2020 loan limits for FHA-insured Title II forward mortgages will be included in a future Single Family Housing Policy Handbook 4000.1 and will affect section II.A.2.a.ii(B) -Low-cost Area; section II.A.2.a.ii(C) – High-cost Area; and section II.A.2.a.ii(D) – Special Exceptions for Alaska, Hawaii, Guam, and Virgin Islands.
For a complete list of FHA loan limits, please visit FHA’s Loan Limits page.
VA
Effective for VA loans guaranteed on or after January 1, 2020, the maximum loan guaranty will change from 25 percent of the Freddie Mac conforming loan limit amount to 25 percent of the “loan amount” (See U.S.C.A § 3703(C)). The Blue Water Navy Vietnam Veterans Act of 2019, signed into law on June 25, 2019, eliminates the limit on the maximum loan guaranty being tied to the Freddie Mac conforming loan limit. As a result, veterans with full entitlement will no longer need to bring in money for a down payment if they borrow above the Freddie Mac conforming loan limit amount.
To view DocMagic’s previous article regarding this update, click here.
To view the VA Circular 26-19-23 which details policy changes related to the Blue Water Navy Vietnam Veterans Act of 2019, click here.
