FHA reaches new loan limits for 2022!
Happy New Year Friends!
Boy, do we have some news to share with you. Some of you may have heard or read about the new changes with FHA; however, for those that have not we wanted to inform you as we are firm believers that knowledge truly is power.
On November 30, 2021, FHA issued Mortgagee Letters. See more about these letters here and here. These letters provided the mortgage limits for Title II FHA-insured forward mortgages (a Title II loan is an FHA-insured 1st mortgage loan that a borrower can use to help purchase a home as a primary residence) and the maximum claim amount for FHA-insured HECMs (HECM stands for Home Equity Conversion Mortgage, and it's pronounced “heck–em.” This reverse mortgage is government–backed and supervised by the Federal Housing Administration (FHA). ... Reverse mortgages get their name because borrowers don't make payments to lenders. Instead, lenders make payments to borrowers.)
The update to the loan "floor" at $420,680 and "ceiling" at $970,800 for FHA's nationwide forward mortgage limit for a one-unit property for 2022 is much higher than in 2021 when the loan limit ceiling was $822,375 (high cost areas nationwide) and the loan limit floor was $356,362. As for the HECM in 2022, the maximum nationwide amount will be $970,800 for all areas, and effective for all case numbers assigned on or after January 1, 2022 until the end of the year; which is more than in 2021 at $822,375. For more information click here.
That said, I'm sure many of you are wondering why the change? This change comes as there has been an uptick in home prices around the country. Having a higher lending threshold allows buyers an opportunity to participate strongly in their market places. Of course, our advice is that you connect with a lender to help you navigate your financing options as soon as possible to ensure you get the best loan for your purchase. Connect with our lender partner to fund your new home here.
For more on this topic click here.