FHA adjusts their mortgage limits each year. Buyers must be aware of what they are and how they may change. The great news is, in many areas, the loan limits have improved to reflect increasing home prices. Here is some important information on updated FHA mortgage limits for Florida.
An Explanation of FHA Mortgage Limits
Mortgage limits are the maximum allowed mortgage amounts for an FHA mortgage. The mortgage amount is less than the purchase price. For example, if you purchase a house for $ 275,000.00
and are paying a 3.5 percent down payment, then the mortgage amount is $ 265,375.00
How FHA Mortgage Limits are Determined
FHA mortgage limits vary by specific city or town. Median property values are compared to limits for national conforming mortgages. Conforming mortgages comply with Freddie Mac and Fannie Mae rules and can be sold to secondary mortgage markets. FHA uses 65 percent of the limit for conforming mortgages to determine their lower limit for low cost markets. Low cost markets are ones where 115% of the median home sales price is lower than 65% of the conforming limit. For higher priced markets, the limit goes as high as 150% of the limit for national conforming mortgages. These cities are those where 115 percent of the median real estate values exceed 150% of national conforming mortgage limit.
Updated FHA Mortgage Limits For Florida
In low cost markets, the mortgage limit is $271,050. Mortgage limits for high cost markets is $625,500. Thus, in no case will the limit be less than $271,500 or be more than $625,500. This range matches 2014 figures, but most areas are in between and will thus see a difference for this year. Adjustments may be made for property type as well. In most active markets, the FHA loan limits increased quite a bit for 2016. This will enable buyers to better compete for listings and increase their purchase price.
Broward County, Single Family $345,000
Broward County, Two Family $441,650
Indian River County, Single Family $271,050
Indian River County, Two Family $347,000
Exact figures are available at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Importance of Updated FHA Mortgage Limits For Florida
If you are pre-approved for an FHA mortgage, you must be aware of the updated FHA mortgage limits for Florida. Purchasing a home over the limit may result in a larger down payment or require you to change to another mortgage program. For example, if the mortgage limit in your area is $ 375,000.00
and you have 3.5 percent down, then your maximum home price is $ 388,601.04
. Purchasing a house for $ 396,373.06
results in a $ 7,772.02
shortage. The buyer must come up with this money. If you do not have the additional funds, this may be a big problem. Remember that the maximum home price may be different for each town that you are considering. It is a good idea to know what they are in advance.