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New 2018 Limits For FHA Loans In Massachusetts

The Federal Housing Administration (also referred to as FHA) has published the loan limits for case numbers issued in 2018. These limits are reviewed on an annual basis in consideration of sale prices in particular counties. If you intend to purchase a house in 2018 and intend to to use an FHA loan, these limits will be critical. The following are the new 2018 limits for FHA loans in Massachusetts.

An Explanation of FHA Loan Limits

Loan limits are the maximum amount that may be borrowed using FHA programs. It is not equal to the purchase price because you must also include your down payment. For example, if you buy a property for $ 350,000.00 and you have a down payment of 3.5 percent , then the loan amount will be $ 337,750.00.

How FHA Loan Limits are Determined

FHA loan limits are set by state and city. Median property values are analyzed against those for national conforming loans. Conforming loans must meet Freddie Mac and Fannie Mae rules and may be bought and sold the secondary mortgage market. FHA takes 65 percent of the conforming loan limit as their floor for low cost areas. Low cost areas are those where 115% of the median real estate price is less than 65% of the conforming loan limit. For high cost regions, the limit may reach 150% of limits for national conforming loans. These cities are ones where 115 percent of the median home value is above 150% of the national conforming loan limits.

New 2018 Limits For FHA Loans In Massachusetts

There is a range for FHA loan limits. The floor applies to low end communities and the ceiling to high priced communities. In 2018, the lowest limit (even in cases where median prices are lower), is $294,515. The ceiling is the absolute maximum loan amount allowed even in regions where median real estate sales may be much higher. The ceiling for 2018 is $625,500. Many areas end up somewhere in between these two amounts. These apply apply to single family real estate. Higher limits are set for multi-family listings. Here is a snapshot of some local areas:

Essex/Middlesex County, Single Family 3,750
Barnstable County, Single Family 1,250
Suffolk/Norfolk County, Single Family 3,750
Bristol County, Single Family 1,250

Visit the HUD website at https://entp.hud.gov/idapp/html/hicostlook.cfm to look up other counties.

Importance of New 2018 Limits For FHA Loans In Massachusetts

Bidding wars frequently occur in many popular markets. When you compete for listings, it is critical to keep the loan limits in mind. You may otherwise end up offering to pay more than what you should. You can certainly exceed the limit if you can make up the difference. Additionally, if you are searching in multiple areas, always check the limits for each. Speak to your loan consultant for additional details.

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About Chris Graves

I grew up in Massachusetts, spent the majority of my young adult life in Boston, and own a home in Windham NH. I have owned properties in MA and NH. I specialize in mortgage lending in Massachusetts and New Hampshire and my company does have the ability to lend in other states. I graduated from the University of Massachusetts in Amherst Massachusetts in 2002. I have a Bachelor’s in Science. In addition to managing a team of loan officers my personal loan production is always in the top of the entire of company. I have personally been in the mortgage business for over 13 years. I pride myself with taking my clients from application to close in the smoothest and quickest way possible, while keeping them well informed during the entire process. I originate my own loans from start to finish and work hand in hand with my loan processors & underwriters to make sure I am updated to the minute with all of my files. I stay up to date with lending guidelines and speak with underwriters on a daily basis to ensure I am aware of all of the lending guidelines in place.

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