July 22, 2022
What Is An FHA Loan Limit?
What is an FHA loan limit? The answer to this question can be found in HUD 4000.1, the FHA Single-Family Lender’s handbook, which begins by explaining: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” Furthermore, the handbook says that for most FHA loan programs the maximum mortgage is either the Nationwide Mortgage Limit for that area or “a percentage of the Adjusted Value”. The handbook breaks down how a home’s adjusted value is calculated, according to transaction. For new purchases or “forward mortgages”, the FHA Lender’s Handbook states: “For | more...