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2019 Loan Limits Increase By FHA

Posted Thursday, December 27, 2018

If you are a real estate agent, investor, or someone looking to purchase or sell a home in 2019, one aspect of the market you may be dealing with will be new loan limit increases set forth by the Federal Housing Administration. According to economists and industry experts, 2019 will see the vast majority of the United States seeing increases. Based on the latest figures, new FHA loan limit ceilings will increase from $679,650 to $726,525 in 2019, while the floor for these loans will increase from $294,515 to $314,827. Because of these increases, agents, investors, and buyers and sellers are expected to reap significant benefits. 

Once these loan increases go into effect January 1, 2019, agents can expect to see an influx of new buyers and sellers enter the market. This will be especially true in areas where real estate costs are traditionally high, such as California, New York, and other major metropolitan areas. As per the National Housing Act, the FHA is required to set single-family loan limits at 115 percent of median house prices. This, coupled with a strong economy and job market, will allow more first-time home buyers, investors, and others to have the financing and confidence needed to make transactions they may have been delaying indefinitely. For agents, this will mean a likely increase in referral leads, since more people will be researching the market. 

Along with agents reaping the rewards of referral leads based on these loan limit increases, investors will also find themselves smiling in 2019. This will be in large part due to the number of counties in the United States that will see increases in FHA loan limits. For example, as recently as 2016 the U.S. Department of Housing and Urban Development raised loan limits in only 188 counties across the United States. However, in 2019, HUD is directing FHA loan limits to be increased in 3,053 counties across the country. This will open up many new opportunities for investors, especially in high-cost areas. As a result, many new real estate projects are expected to be started by investors, which will help to boost the housing market, new-home starts, and new home construction. 

Finally, increasing the FHA loan limits is also expected to begin turning the tide of people choosing to rent rather than purchase homes. Though interest rates are beginning to rise and impact mortgages, buyers will nevertheless decide now is the time to purchase that property they've had their eye on for quite some time. Likewise, those seeking to sell homes will have an ample array of eager buyers in the marketplace, since the loan limit increases will expand the number of properties buyers will be able to purchase.