New FHA Loan Limits for 2009

The Housing and Economic Recovery Act of 2008, approved in July 2008, based the new FHA loan limits on the Fannie Mae and Freddie Mac loan limits that were set by the FHFA last week (See: Fannie Mae & Freddie Mac Loan Limits to remain at $417,000 for 2009). The FHA loan limits are 115% of the applicable Fannie Mae and Freddie Mac loan limits except for low-cost and high-cost areas which will be limited to the floor and ceiling limits as described below.

FHA Floor Loan Limits
The “floor” FHA loan limits are the lowest limits throughout the country. The floor FHA loan limits are set at 65% of the Fannie Mae & Freddie Mac loan limits and apply to areas where the 115% of the median home price is at or below this level. These floor limits are:

• 1 Unit $271,050


• 2 Unit $347,000


• 3 Unit $419,400


• 4 Unit $521,250

FHA Ceiling Limits
In high-cost areas, the FHA “ceiling” loan limits are set at 150% of the Fannie Mae & Freddie Mac loan limits and apply to areas where the 115% of the median home price is at or above this level. The ceiling limits are:

• 1 Unit $625,500


• 2 Unit $800,775


• 3 Unit $967,950


• 4 Unit $1,202,925

There are further special exceptions that apply to Alaska, Hawaii, Guam and the US Virgin Islands due to the high cost of construction in those areas. Limits in these are are 150% of the ceiling limits above. You can a list of the high-cost areas and areas with special exceptions at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/08-36mla1.xls.

FHA Loan Limits for the Chicago Metropolitan Area
Effective with all loans approved after December 31, 2008, there will be new, and in most cases lower, loan limits for FHA Loans. For the Chicago MSA, the new limits are as follows:

• 1 Unit $365,700


• 2 Unit $468,150


• 3 Unit $565,900


• 4 Unit $703,250

These limits for the Chicago MSA include the counties of Cook, De Kalb, Du Page, Grundy, Kane, Kendall, Lake, Mc Henry & Will.

Adjacent counties in Indiana and Wisconsin will all have the same FHA loan limits as well. These include the county of Kenosha in Wisconsin and the counties of Jasper, Lake, Newton and Porter in Indiana. Need more info? Send me an email or give me a call!

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