New FHA and VA loan limits for 2018


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The FHA reported that the maximum loan limits for FHA term mortgages will increase in 3,011 counties next year. For these mortgage limits calculated by Metropolitan Statistical Area (MSA) and county, the FHA will increase the floor of the loan from $ 275,665 (FY 2017) to $ 294,515 (FY 2018). This increase in FHA’s “floor” and “ceiling” loan limits applies to a one-unit home as stated in section II.A.2.a.ii of HUD’s Single Family Housing Policy Handbook 4000.1. The loan limit ‘ceiling’ will also increase in high cost areas from $ 636,150 (FY 2017) to $ 679,650 (FY 2018). The FHA explained that increases in the FHA’s “floor” and “ceiling” loan limits for calendar year 2018 were due to a significant rise in median home prices that raised Federal Housing Finance Agency (FHFA) limits.


The maximum loan limits of the FHA apply to FHA Title II term mortgage insurance under the National Housing Act, and are in effect for case numbers assigned on or after January 1, 2018, and remain in effect through December 31, 2018. For more information For detailed information on the FHA limits for term mortgages for 2018, see Mortgagee Letter 2017-16.

The VA has posted on its website that its 2018 County Loan Limits will be the same as the limits set by the Federal Housing Finance Agency (FHFA). These county borrowing limits are effective January 1, 2018. Please note that lenders are instructed to refer only to the Single Unit Limit column in the FHFA table ‘Maximum Loan Limits from Fannie Mae and Freddie Mac for mortgages acquired in calendar year 2018 and Originated after 1/10/11 or before 1/7/07 ”to determine the VA guarantee.
The VA does not place a limit on the amount a veteran can borrow to buy a home, but the law sets the maximum amount guaranteed by the VA for a home loan. The amount of liability that the VA can assume usually affects the amount borrowed that an institution will borrow. The loan limits represent the amount that a qualified veteran with full rights can borrow without money. Eligible veterans have a basic entitlement of $ 36,000. With no down payment, lenders typically borrow up to four times a veteran’s available entitlement. Lenders can provide loans that exceed the effective loan limit, but usually require a down payment equal to 25 percent of the difference between the loan amount and the County Loan Limit.


Gavin T. Ales is Chief Compliance Officer at Torrance, California-based DocMagic Inc.Gavin T. Ales is the Chief Compliance Officer at Torrance, California DocMagic Inc. He can be reached by phone at (800) 649-1362, ext. 6446 or email Gavin@DocMagic.com.

This article originally appeared in the January 2018 print edition of National Mortgage Professional Magazine.


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