2009 FHA Limit Set

November 10, 2008

By MORTGAGE DAILY.COM Staff

Emergency economic legislation temporarily increased the limit on loans insured by the Federal Housing Administration. But that increase is set to expire this year. However, other legislation made permanent increases to maximum FHA loans.

H.R. 5140, the Economic Stimulus Act of 2008, was signed by President Bush on Feb. 13. Among other provisions, it temporarily raised -- until Dec. 31, 2008 -- the FHA limit in high-cost areas to $729,750. Prior to the legislation, the FHA limit was $362,790.

H.R. 3221, the Housing and the Economic Recovery Act of 2008, was signed by Bush on July 30. Among its provisions are a permanent increase to FHA-insured loan amounts -- which the U.S. Department of Housing and Urban Development said today would be $625,500 in high-cost areas. In low-cost areas, the limit is $271,050.

Loan limits for specific areas are set at 115 percent of the median house price.

In high-cost areas, the FHA limit on a duplex is $800,775, while loans on triplexes can go as high as $967,950 and four-unit properties can be financed for up to $1,202,925, according to Mortgagee Letter 2008-36 distributed Friday. In low-cost areas, the maximum FHA loan on a four-unit property is $521,250.

In for Alaska, Guam, Hawaii and the Virgin Islands, the FHA limit is set at $938,250 for a single-family residence.

Last month, the Federal Housing Finance Agency confirmed the 2009 conforming loan limit in high-cost areas at $625,500.

This month, HUD issued Mortgagee Letter 2008-35 indicating that a national limit had been established on reverse mortgages at $417,000.