Updated Limits For FHA Loans In Lexington MA

The Federal Housing Administration (also known as FHA) reviews their loan limits every year. If you are purchasing a house soon and would like to to use an FHA loan, it is useful to be aware of these limits and how they might fluctuate. Below is an overview of the updated limits for FHA loans in Lexington MA.

Definition of FHA Loan Limits

Loan limits reflect maximum loan amounts that meet the requirements of an FHA loan. The loan amount is less than the sales price. For example, if you find a house for $ 350,000.00
and are submitting 3.5% down, then your loan amount would be $ 337,750.00
.

How Are FHA Loan Limits Calculated

FHA loan limits range by county and city. Median real estate sale prices are measured against limits for national conforming loans. Conforming loans are ones that comply with the Fannie Mae and Freddie Mac guidelines and can be sold to secondary mortgage markets. FHA takes 65% of the limit for conforming loans and uses that as their floor for low cost areas. Low cost areas are ones where 115% of the median real estate price is less than 65% of the conforming loan limit. For high end areas, it can reach 150% of national conforming loan limits. High end communities are those where 115% of the median real estate price is higher than 150% of the limit for national conforming loans.

Updated Limits For FHA Loans In Lexington MA

The loan range is $271,050 and $625,500. Thus, in no area will it fall less than $271,500 or exceed $625,500. This range is the same as the previous year, but a majority of cities are in the middle and will thus have a difference for 2015. Additionally, there are differences between single family and multi-family homes. You can search for exact limits at https://entp.hud.gov/idapp/html/hicostlook.cfm.

Why Is It Important to Understand Updated Limits For FHA Loans In Lexington MA

If you intend to use the FHA program, you should remain aware of the updated limits for FHA loans in Lexington MA. Purchasing a property over the max will require you to put more money down or require you to revert to another loan alternative. For example, if the loan limit in your market is $ 350,000.00
and you hope to give a 3.5 percent down payment, then your max price is $ 362,694.30
. Purchasing a home for $ 369,948.19
leads to a $ 7,253.89
shortage. You would need to cover that difference. If you do not have these additional funds, this may be detrimental. Do not forget that the maximum price limit may not be identical for each city that you are looking in. It is helpful to know what they are ahead of time.