Areas are eligible for FHA loan limits above the national standard limit, and up to the national ceiling level, based on that particular area’s median area home prices.
For areas considered to be “high cost,” such as San Francisco, Washington, D.C., New York, and Los Angeles, the FHA loan limit will remain at the national ceiling, $625,500.
For areas considered to be “low cost,” the FHA loan limit will remain at $271,050.
The FHA recalculates its national loan limit on a yearly basis. The limits are based on a percentage calculation of the nation conforming loan limit.
Depending on those limits, FHA's minimum national loan limit "floor" is at 65% of the national conforming loan limit. The floor applies to those areas where 115% of the median home price is less than 65% of the national conforming loan limit, according to the FHA.
In 2014, the Arizona FHA loan limits were drastically reduced by as much as -21.7% in Maricopa County, going from $346,250 (2013) to $271,050 (2014) and -14% in Pima County, from $316,250 (2013) to $271,050 (2014). The highest loan limit in Arizona is in Coconino County at $362,250 (2014) reduced from $450,000 (2013), a -19.5% reduction. These remain the same for 2015.
On the higher end of the scale, any area where the loan limit exceeds the "floor" is considered a high cost area. The maximum FHA national loan limit "ceiling" is at 150% of the national conforming limit. In areas where 115% of the median home price (of the highest cost county) exceeds 150% of the conforming loan limit, the FHA loan limits remain at 150% of the conforming loan limit, the FHA said.
Additionally, the FHA also announced that the mortgage loan limits for FHA-insured reverse mortgages will remain unchanged in 2015. The FHA’s reverse mortgage program, called the Home Equity Conversion Mortgage, will continued with a maximum claim amount of $625,500.
The actual loan amounts are determined by property value, borrower age, and current interest rates.
These loan amounts went into effect on Jan 1, 2015 and will remain in effect until the end of the year.
For a look at the loan limits for high cost areas, click here.
For a look at the loan limits for lower cost areas, click here.