November 24, 2021
FHA loan limits for 2022 have not been published at the time of this writing but many who are planning to purchase a home in the new year are eager to know whether loan limits are changing–higher or lower depending on where you live.
When do the new rates get published? This time last year, FHA loan limits for 2021 wound up being published on December 2, 2020, FHA issued Mortgagee Letter 20-41 (setting the FHA loan limits for purchase loans, also known as forward mortgages) and Mortgagee Letter 20-42, establishing the limits for FHA Home Equity Conversion Mortgage loans.
In both cases, the loan limits are effective starting on the first day of the new year and not before. That means that even if you can look up the FHA loan limits for 2022 before the new year kicks in, you won’t be able to get an FHA case number with those limits unless the number is assigned in the new year.
If you apply prior to the new year, your FHA loan limit will depend on the date of the case number assignment. If that number is assigned before the new year, the rates for the new year DO NOT APPLY.
FHA loan limits are not standardized–loan limits vary depending on whether the market you’re buying in is considered a high-cost area or not. Some markets are below average, and some
If you use the search tool on the FHA Mortgage Limits page at HUD.gov you can look up the limits by state, county, or by Metropolitan Statistical Area. It is smart to look at the FHA loan limits for multiple areas AND look at the loan limits for properties with more than one unit. You never know what you may wind up being tempted to buy.
According to HUD.gov, “The results page will also include a Median Sale Price value for each jurisdiction.”
These sale prices are described as being the median price estimates used to figure out the FHA loan limit. HUD.gov says these are for “the high-price county within each defined metropolitan area, and for the high-price year starting with 2008 and ending in the year just prior to the effective year of the loan limits.”
The site also warns that those median prices “only directly determine the actual (1-unit) loan limits when the calculated limit (115% of the median price) is between the national ceiling and floor values for the loan limits”. The FHA loan limits for multiple-unit properties are described as being in “fixed multiples of the 1-unit limits”.
Mortgage loan limits for some areas may or may not change for a given area in the new year. It’s not uncommon for there to be some adjustments in some markets but not others. 2021 was an unusual year in the housing market in terms of home prices so it’s entirely possible that the new year’s limits may be affected by that variable.
The FHA and HUD may publish the new loan limits a few days or even a few weeks before the end of the old year.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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