Borrowing Limits On the FHA Home Loans

The borrowing limits on FHA home loans for the year 2010 have been announced. The limits set on the amount borrowed can borrow on the FHA loan is dependent upon the local and regional housing market limitations and prices. FHA home loans or available throughout the United States of America and the pouring limits are determined by the County of residence.

The basic borrowing limit on an FHA home loan has been set to the same limit as a confirming Fannie Mae or Freddie Mac national home loan. This amount is set at $417,000. However since FHA guidelines provide for relations according to low-cost and high-cost regions, there are certain floor and ceiling rates that might come into play in your area of residence.

Understanding floor and ceiling borrowing limits on FHA home loans.

Certain areas that are considered to be low-cost areas where the building cost is lower than the rest of the country are assigned a maximum FHA borrowing limit of 65% of the Fannie Mae confirming limit of $417,000. This is known as the floor limit and represents the lowest maximum amount that can be borrowed in these low-cost areas. This will enable borrowers to buy a relatively expensive for in a low-cost area using an FHA home loan. These are the borrowing limits prescribed in the low-cost areas according to the size of the home.

One unit home – $271,050

Two unit home — $347,000

Three unit home — $419,000

Four unit home — $521,250

Other areas that are considered to be high cost similar limits had been assigned.

One unit home — $729,750

Two unit home – $934,200

Three unit home — $1,129,250

Four unit home — $1,403,400

The loan limits offered by the FHA in areas such as Alaska, Guam, Hawaii and the Virgin Islands or even higher due to the higher construction costs. These loan limits surpasses the limits set in the “ceiling” category and are referred to as “the roof”. These are the roof limits in these high cost areas.

One unit home — $1,094,625

Two unit home — $1,401,300

Three unit home — $1,693,875

Four unit home — $2,105,100

Most of the FHA borrowings have limits that fall between the ceiling and floor. You can check the local borrowing limits on an FHA long in your area by consulting an approved FHA lender or by checking online here https://entp.hud.gov/idapp/html/hicostlook.cfm.

FHA Limit on Reverse Mortgage

The maximum borrowing limit on a reverse mortgage through the FHA is set at $625,000 and depends on certain other factors such as equity in the home and the homeowners age. Reverse mortgage through the FHA is known as the Home Equity Conversion Mortgage Program (HECM).