On December 2, 2020, the Federal Housing Administration (“FHA”) issued Mortgagee Letter 2020-41, 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, 2021, through December 31, 2021.
FHA has raised the maximum loan limits across all counties based on the median house price in each area. The calendar year 2021 loan limits will be included in a future Single-Family Housing Policy Handbook 4000.1 update, including 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.
The FHA will increase the low-cost area “floor” from $331,760 to $356,362 for one-unit properties. This figure is equal to 65% of the national conforming loan limit of $548,250, recently announced by the Federal Housing Finance Agency. The loan limit “ceiling” will also increase in high costs areas from $765,600 to $822,375. This “ceiling” amount is equal to 150% of the national conforming limit for one-unit properties. Alaska, Hawaii, Guam and the Virgin Islands are special exception areas and have a higher ceiling limit of $1,233,550 for a one-unit property.
For a complete list of FHA loan limits, please visit FHA’s Loan Limits page.
