www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

 
October 24, 1994
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
Mortgagee Letter 94-52
 
     TO:  ALL APPROVED MORTGAGEES
 
        SUBJECT:  Single Family Loan Production - Increase in FHA Maximum
                          Mortgage Limits
 
                This is to inform you that the FHA Single Family maximum
        mortgage limits have been increased as a result of recent
        legislation passed by the Congress and enacted into law.
 
                The nationwide basic mortgage limits ("the floors") for 1-4
        unit properties will now be 38 percent of the Fannie Mae/Freddie
        Mac conforming loan limits.  Therefore, HUD's new basic
        nationwide mortgage limits are as follows:
 
                                                New Limit
 
               One Unit       $  77,197
 
               Two Units      $  98,700
 
               Three Units    $ 119,350
 
               Four Units     $ 148,300
 
                By regulation, the mortgage amount must be a multiple of
        $50.00 for a mortgage that does not include financing of a
        mortgage insurance premium (primarily mortgages for condominium
        units).  For condominium mortgages and other mortgages affected
        by this requirement, the maximum mortgage amount for a
        condominium unit is $77,150.  Also, please note that the new
        limits shown above for two-, three- and four- unit properties are
        higher proportionately than our old limits because of using the
        Fannie Mae/Freddie Mac amounts.
 
                        2
 
The legislation also increased the mortgage limit "ceilings" for
high cost areas to 75 percent of the Fannie Mae/Freddie Mac conforming
loan limit.  This means that the new ceilings in most high cost areas
are as follows:
 
                                                New Limit
 
               One Unit       $ 152,362
 
               Two Units      $ 194,850
 
               Three Units    $ 235,550
 
               Four Units     $ 292,800
 
A list of the high cost areas that now have limits at these new
ceilings is attached to this Mortgagee Letter.  Other areas with
current limits higher than the new floors are not affected by the new
legislation except that the limit for an area cannot be reduced below
the current limit.
 
Pursuant to Section 214 of the National Housing Act, mortgage
limits for Alaska, Guam, Hawaii and the Virgin Islands may be adjusted
up to 150 percent of the new ceilings.  This results in new ceilings
for these areas of $228,543; $292,250; $353,300 and $439,200 for one-,
two-, three- and four- family dwellings, respectively.  An increase
pursuant to this section is also reflected in the attached list.
 
The legislation also indexes FHA mortgage limits to the Fannie
Mae/Freddie Mac limits.  This means that the FHA limits will adjust
each year in January when the Fannie Mae/Freddie Mac limits are
adjusted.  Lenders will be advised of subsequent adjustments by
Mortgagee Letter.
 
In the near future, the Department will publish in the Federal
Register a new comprehensive list of all areas with high cost mortgage
limits.  In the meantime, any questions concerning this letter or the
mortgage limits in a particular area should be addressed to the local
HUD Office.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner
 
     Attachment
 
Attachment 1
 
        The following areas' FHA single family maximum mortgage limits are now
at the revised statutory ceiling.
 
     *  Orange County, CA PMSA
     *  Los Angeles-Long Beach, CA PMSA
        Oakland, CA PMSA
        Riverside-San Bernardino, CA MSA
        Salinas, CA MSA
        San Diego, CA MSA
        San Francisco, CA PMSA
        San Jose, CA PMSA
        Santa Cruz-Watsonville, CA PMSA
        Santa Barbara-Santa Maria-Lompoc, CA MSA
        Santa Rosa, CA PMSA
        Vallejo-Fairfield-Napa, CA PMSA
     *  Ventura, CA PMSA
        Bridgeport, CT PMSA
        Danbury, CT PMSA
        New Haven-Meriden, CT PMSA
        Stamford-Norwalk, CT PMSA
        Waterbury, CT PMSA
        Washington, DC-MD-VA-WV PMSA
        Boston, MA-NH-NE-CT PMSA
        Brockton, MA PMSA
        Fitchburg-Leominster, MA MSA
        Lawrence, MA-NH PMSA
        Lowell, MA-NH PMSA
        New Bedford, MA PMSA
        Portsmouth-Rochester, NH-NE PMSA
        Worcester, MA-CT PMSA
        Salem, MA MSA
        Bergen-Passaic, NJ PMSA
        Dutchess County, NY PMSA
        Jersey City, NJ PMSA
        Middlesex-Somerset-Hunterdon, NJ PMSA
        Monmouth-Ocean, NJ PMSA
        Nassau-Suffolk, NY PMSA
        Newark, NJ MSA
        New York, NY MSA
        Newburg, NY-PA PMSA
    **  Honolulu, HI MSA
 
*  Los Angeles, Orange and Ventura Counties have higher limits under the
Section 203(k) and Section 203(h) programs as explained in Mortgage Letter
94-10.
 
** Section 214 limits