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2018 FHA Loan Limits Increase

2018 FHA Loan Limits Increase

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

The improvement in the housing market and increasing home prices have resulted in higher FHA loan limits for 2018.  2018 represents the second year in a row — and only the second time in over a decade — that FHA loan limits increased.  The higher 2018 FHA loan limits underscore the overall health of the real estate industry as well as rising property values.  Specifically, the basic standard 2018 FHA loan limit for a single unit property increased by approximately 7% as compared to the 2017 FHA loan limit.

2018 FHA Loan Limits

2018 FHA Loan Limits are increasing

The 2018 FHA loan limits are important because they determine the maximum mortgage amount according to FHA Program rules.  In short, the higher the FHA loan limit, the higher the mortgage amount you may be able to qualify for and the more home you can afford.

Loan limits are especially significant for FHA mortgages because borrowers are only required to make a down payment of 3.5% of the property purchase price according to FHA Program guidelines.  Higher FHA loan limits mean that borrowers may be able to afford significantly more home without a proportional increase in their down payment.  For example, the basic standard 2018 FHA loan limit for a single unit property increases by $18,850.  So in 2018 a home buyer could potentially use an FHA loan to buy a home that costs $18,850 more with only a $660 increase in the required down payment.

Below, we outline the FHA loan limit changes and summarize the FREEandCLEAR resources you can use to determine the 2018 FHA loan limit for your county.  Please note that there is one set of FHA loan limits for the contiguous United States, District of Columbia and Puerto Rico and a higher set of loan limits for Alaska, Guam, Hawaii and the U.S. Virgin Islands.  Additionally, within the contiguous United States, District of Columbia and Puerto Rico there is a basic standard FHA loan limit and a high cost FHA loan limit for properties located in counties with higher property values.

2018 FHA Loan Limits — United States, District of Columbia and Puerto Rico

In the contiguous United States, Washington D.C. and Puerto Rico, the basic standard FHA loan limit for a single unit property increases from $275,665 to $294,515 in 2018. The basic standard 2018 FHA loan limit for a four unit unit property increases from $530,150 to $566,425.  The tables below compares the basic standard 2018 FHA loan limits to the 2017 loan limits.

Contiguous United States, District of Columbia and Puerto Rico
Basic Standard FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 294,515 $ 275,665 6.8%
2 $ 377,075 $ 352,950 6.8%
3 $ 455,800 $ 426,625 6.8%
4 $ 566,425 $ 530,150 6.8%

In the contiguous United States, Washington D.C. and Puerto Rico, the high cost area FHA loan limit for a single unit property increases from $636,150 to $679,650 in 2018. The high cost area 2018 FHA loan limit for a four unit unit property increases from $1,223,475 to $1,307,175.  The tables below compares the high cost area 2018 FHA loan limits to the 2017 loan limits.

Contiguous United States, District of Columbia and Puerto Rico
High Cost Area FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 679,650 $ 636,150 6.8%
2 $ 870,225 $ 814,500 6.8%
3 $ 1,051,875 $ 984,525 6.8%
4 $ 1,307,175 $ 1,223,475 6.8%

2018 FHA Loan Limits — Alaska, Hawaii, Guam and the U.S. Virgin Islands

The FHA loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands are higher than the loan limits for the contiguous United States.  In Alaska, Hawaii, Guam and the U.S. Virgin Islands the FHA loan limit for a single unit property increases from $954,225 to $1,019,475 in 2018. The 2018 FHA loan limit for a four unit unit property increases from $1,835,200 to $1,960,750.  The tables below compares the general 2018 FHA loan limits to the 2017 loan limits.

Alaska, Guam, Hawaii, and the U.S. Virgin Islands                           
FHA Loan Limits
Number of Units 2018 2017 Change (%)
1 $ 1,019,475 $ 954,225 6.8%
2 $ 1,305,325 $ 1,221,750 6.8%
3 $ 1,577,800 $ 1,476,775 6.8%
4 $ 1,960,750 $ 1,835,200 6.8%

FREEandCLEAR Resources

As always, all the FREEandCLEAR resources are free to use.  We encourage you to use our tools to understand how the 2018 FHA loan limits apply to you.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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