FHA adjusts their loan limits on an annual basis. Home buyers must keep in mind these limits and when they may fluctuate. For this year, in many areas, the limits have improved to accommodate the improving market. Below are a few important details on new FHA loan limits for MA.
Definition of FHA Loan Limits
Loan limits reflect maximum loan values complying with an FHA loan. The loan value is lower than the sales price. For instance, if you find a house for $ 200,000.00 and are making a 3.5% down payment, then your loan value comes out to $ 193,000.00.
FHA Loan Limits Range
FHA loan limits vary by market. Median property prices are analyzed against the national conforming loan limits. Conforming loans are those that comply with the Fannie Mae and Freddie Mac rules and may be sold in secondary mortgage markets. FHA calculates 65 percent of the limit for conforming loans to set their bottom limit for low cost markets. Low cost markets are cities where 115% of the median real estate value is less than 65% of the conforming loan limit. For higher priced markets, the limit can reach 150% of the national conforming loan limit. These areas are those where 115 percent of the median real estate values exceed 150% of the national conforming loan limit.
New FHA Loan Limits For MA
The loan range is $271,050 and $625,500. Thus, in no community will it fall less than $271,500 or be greater than $625,500. Both the low and high end figures are unchanged from 2014, but many communities are not at this min or max and will have a change for this year. There are also adjustments for single family and multi-family units. In a majority of prospering markets, the FHA loan limits increased significantly for 2016. Home buyers in markets where home prices have skyrocketed might be able to increase their price range and therefore have additional options to choose from.
Essex County, Single Family $523,250
Essex County, Two Family $669,850
Middlesex County, Single Family $523,250
Middlesex County, Two Family $669,850
Specific details are available at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Importance of New FHA Loan Limits For MA
If you are pre-approved for the FHA program, you must remain cognizant of the new FHA loan limits for MA. Buying a home above the max may require a larger down payment or require you to find another type of loan. For example, if the loan limit is $ 300,000.00 and you hope to submit a 3.5 percent down payment, then your price limit is $ 310,880.83. Selecting a property for $ 317,098.45 results in a $ 6,217.62 gap. The home buyer would need to come up with that difference. If you do not have it, this may be a huge problem. Do not forget that the max purchase limit might be different for each city that you are looking in. It is a good idea to know what they are ahead of time.