FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Maximum Mortgage Amounts (01/01/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Maximum Mortgage Amounts (01/01/2025)

a. Maximum Mortgage Amounts (01/01/2025) A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits. Under most programs, the maximum Mortgage is the lesser of the Nationwide Mortgage Limit for the area, or a percentage of the Adjusted Value. For purchase transactions, the Adjusted Value is the lesser of: • purchase price less any inducements to purchase; or • the Property Value. For refinance transactions: • For Properties acquired by the Borrower within 12 months of the case number assignment date, the Adjusted Value is the lesser of: o the Borrower’s purchase price, plus any documented improvements made subsequent to the purchase; or o the Property Value. • Properties acquired by the Borrower within 12 months of case number assignment by inheritance, through a Gift from a Family Member, or through a non-monetary transaction may utilize the calculation of Adjusted Value for Properties purchased 12 months or greater. • For Properties acquired by the Borrower greater than or equal to 12 months prior to the case number assignment date, the Adjusted Value is the Property Value. i. National Housing Act’s Statutory Limits The National Housing Act establishes the maximum Mortgage limits and the mortgage amounts for all FHA mortgage insurance programs. ii. Nationwide Mortgage Limits [Effective for case numbers assigned on or after January 1, 2025] Mortgage limits are calculated based on the median house prices in accordance with the statute. FHA’s Single Family mortgage limits are set by Metropolitan Statistical Area (MSA) and county and will be published periodically. FHA’s Single Family mortgage II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages 2. Allowable Mortgage Parameters Handbook 4000.1 175 Last Revised: 11/26/2025 limits are available by MSA and county, or by downloading a complete listing. FHA publishes updated limits effective for each calendar year. These limits will be set at or between the low-cost area and high-cost area limits based on the median house prices for the area. (A) Requests for Local Increases Any requests to change Mortgage Loan limits determined by HUD must be received by FHA at the email address no later than 30 Days from the publication of the limits each year. Any changes in area Mortgage Loan limits as a result of valid appeals will be retroactively in effect for case numbers assigned on or after January 1 of each year. Each request to change Mortgage Loan limits must contain sufficient housing sales price data, listing one-family Properties sold in an area within the 12-month look- back period, November through October of the previous year. Requests should differentiate between Single Family residential Properties, and condominiums or cooperative housing units. Ideally, the data provided should also distinguish between distressed and non-distressed sales. Requests for a change will only be considered for counties for which HUD does not already have home sales transaction data for the calculation of Mortgage limits. All requests to change Mortgage Loan Limits must be submitted to FHA’s Resource Center via email at [email protected]. All requests must include in the subject line: Mortgage Loan Limit Requests. (B) Low-Cost Area The FHA national low-cost area mortgage limits, which are set at 65 percent of the national conforming limit of $806,500 for a one-unit Property, are, by property unit number, as follows: • One-unit: $524,225 • Two-unit: $671,200 • Three-unit: $811,275 • Four-unit: $1,008,300 (C) High-Cost Area The FHA national high-cost area mortgage limits, which are set at 150 percent of the national conforming limit of $806,500 for a one-unit Property, are, by property unit number, as follows: • One-unit: $1,209,750 • Two-unit: $1,548,975 • Three-unit: $1,872,225 • Four-unit: $2,326,875 II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages 2. Allowable Mortgage Parameters Handbook 4000.1 176 Last Revised: 11/26/2025 (D) Special Exceptions for Alaska, Hawaii, Guam, and the Virgin Islands Mortgage limits for the special exception areas of Alaska (AK), Hawaii (HI), Guam (GU), and the Virgin Islands (VI) are adjusted by FHA to account for higher costs of construction. These four special exception areas have a higher ceiling as follows: • One-unit: $1,814,625 • Two-unit: $2,323,450 • Three-unit: $2,808,325 • Four-unit: $3,490,300 iii. Financing of Upfront Mortgage Insurance Premium Unless otherwise stated in this section (Origination through Post-closing/Endorsement), restrictions to mortgage amounts and LTVs are based upon the amount prior to the financing of the Upfront Mortgage Insurance Premium (UFMIP) (Base Loan Amount). The total mortgage amount may be increased by the financed UFMIP amount. iv. Calculating Maximum Mortgage Amounts on Purchases The maximum mortgage amount that FHA will insure on a specific purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. In order for FHA to insure this maximum mortgage amount, the Borrower must make a Minimum Required Investment (MRI) of at least 3.5 percent of the Adjusted Value. v. Additions to the Mortgage Amount for Repair and Improvement (A) Appraiser Required Repairs A Mortgagee may add repair costs to the sales price before calculating the mortgage amount if: • the repairs are required by the Appraiser to meet HUD’s MPR; • the repairs are paid for by the Borrower; and • the sales contract or addendum identifies the Borrower as the party responsible for payment and completion of the repairs. The maximum amount of repair costs that may be added to the sales price is the lesser of: • the amount by which the value of the Property exceeds the sales price; • the Appraiser’s estimate of repairs; or • the amount of the contractor’s bid. (B) Energy-Related Weatherization Repairs and Improvements A Mortgagee may add energy-related weatherization costs, to be paid for by the Borrower, in accordance with Weatherization policies. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages 2. Allowable Mortgage Parameters Handbook 4000.1 177 Last Revised: 11/26/2025 (C) Solar Energy Systems A Mortgagee may add the cost of a solar energy system (including active and passive solar- and wind-driven systems) to the Mortgage in accordance with Solar and Wind Technologies policies. When adding the cost of a solar energy system to the mortgage amount, the maximum insurable mortgage limit may be exceeded by up to 20 percent.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Maximum Mortgage Amounts (01/01/2025) · source URL · snapshot 8c03836f77f317e1