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FHA Loan Limits Increase

A 1.9 percent increase in FHA loan limits announced in mid-December will help broaden the home financing options for middle-income American, NAR analysts say. In high-cost areas, the increase could bring more buyers into the market. The CALIFORNIA ASSOCIATION OF REALTORS® estimates that nearly 4,500 more consumers could now become homebuyers through the FHA mortgage-insurance program.

The 1.9 percent increase in the limits on FHA-insured loans on residential properties becomes effective for loans closed as of Jan. 1, according to FHA officials. NAR encouraged and applauded the increase.

In high-cost areas, the FHA loan limit is 95 percent of the area median home price, up to 75 percent of the Freddie Mac limit or $155,250 for single-family homes. The FHA base loan amount rises to $78,660 for single-family homes. The base loan amount is the basic, nationwide FHA mortgage limit and is effective in all counties except those that qualify as a high-cost area.

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