In the mortgage business, there is always anticipation around this time of year as we wait for the new loan limits to be announced. I know, as far as excitement goes this is up there with waiting for the new phone book to come out. But this year the drama was a little more pronounced. The conventional loan limits (the maximum loan that will be insured by Fannie Mae and Freddie Mac,) have stayed the same for the last several years, and with home prices soft the betting was that they would stay the same again this year. And the betting on that count was right. The maximum loan for a single family home here in the Chicago area and throughout most of the country stayed the same at $417,000. In high cost areas (Hawaii and parts of California, mostly) the max loan limit actually went down. Earlier this year loan limits were raised in these high priced areas in order to help the real estate market and take up the slack as many Jumbo lenders stopped making loans. The Max mortgage in the high priced areas was $729,950, after the first of the year it will be going down to $625,500.

The conventional limits as of January 1st will be:

          General                         High-Cost 

1Unit           $417,000                        $625,500

2 Units        $533,850                        $800,775

3 Units        $645,300                        $967,950

4 Units        $801,950                        $1,202,925

The bigger uncertainty and anticipation was what would happen with FHA mortgages. Earlier in the year FHA raised their limits temporarily to $410,000 for a single family home. FHA used to be just a little slice of the mortgage market, but this year, partly because of the increase in loan limits and partly because of tightening conventional standards, FHA has become the number 1 choice for the majority of home buyers. Everyone expected that the FHA loan limits would go down, the question was how much. We now have the answer. Here in the Chicago area the max FHA loan for a single family home will be $365,700. This is based on 115% of the median home price in the area. Nationally the lowest max mortgages will be capped at $271,050 and in high priced area the loans are capped at $625,500 for a single family home.

Here are the FHA limits for the the greater Chicago area which includes Cook County, Dekalb County, Dupage County, Grundy County, Kane County, Kendall County, Lake County, McHenry County and Will County: 

1 Unit        $365,700

2 Units      $468,150

3 Units      $565,900

4 Units      $703,250

In other areas where 115 percent of the median house price is less than 65 percent of the Freddie Mac limit (which includes most of Down State Illinois), the FHA limits are as follows:

1 Unit       $271,050

2 Units      $347,000

3 Units      $419,400

4 Units      $521,250

Here are the limits in higher priced areas:

1 Unit        $625,500

2 Units      $800,775

3 Units      $967,950

4 Units      $1,202,925

If you are looking for a loan in a higher priced area, or if you are thinking FHA and your loan will be above the new limit, you might want to act fast. The old guidelines are good for mortgages that are entered into the system up until the end of the year. After that you will be subject to the new limits. If you have questions on the max mortgage for a specific location, give me a call.

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