2016 Updated FHA Loan Limits For Melrose MA

In Real Estate by Tramontozzi Law

FHA adjusts their loan limits on an annual basis. If you are purchasing a property this season and would like to to use an FHA loan, it is essential to be familiar with the applicable limits and how they can fluctuate. The good news is, in many communities, the limits have gone up to reflect increasing property values. Below is an overview of the updated FHA loan limits for Melrose MA.

An Explanation of FHA Loan Limits

Loan limits reflect highest loan amounts complying with an FHA loan. The loan amount is less than the sales price. For example, if you buy a house for $ 275,000.00 and are paying 3.5 percent down, then your loan amount would be $ 265,375.00 .

FHA Loan Limits Calculations

FHA loan limits range by particular city or town. Median property prices are analyzed against limits for national conforming loans. Conforming loans must fall within the Fannie Mae and Freddie Mac rules and may be transferred in secondary mortgage markets. FHA uses 65% of the conforming loan limit to set their bottom limit for low end areas. Low end areas are towns where 115% of the median property sales price is lower than 65% of the conforming limit. For higher priced regions, the limit goes as high as 150% of the limit for national conforming loans. High end cities are those where 115 percent of the median home prices are greater than 150% of national conforming loan limit.

Updated FHA Loan Limits For Melrose MA

The loan range is between $271,050 and $625,500. So, in no community will the limit fall under $271,500 or be greater than $625,500. Both the low and high end figures are the same as the previous year, but many communities fall in the middle and will thus notice a change for this year. Adjustments may be made for the type of property as well. In a majority of prospering markets, the loan limits adjusted significantly for 2016. This will allow buyers to compete more effectively for listings and increase their purchase price.

Middlesex Countty, Single Family $523,250
Middlesex Countty, 2-Family $669,850
Middlesex Countty, 3-Family $809,700
Middlesex Countty, 4-Family $1,006,250

Particular loan limits for your community can be found on the HUD website at https://entp.hud.gov/idapp/html/hicostlook.cfm.

Importance of Updated FHA Loan Limits For Melrose MA

It is important to know the max purchase price when previewing homes. Selecting a home over the max will require you to put more money down or require you to use another loan program. For example, if the loan limit is $ 375,000.00 and you have 3.5 percent down, then your price limit is $ 388,601.04 . Buying a home for $ 396,373.06 would mean another $5,648 down payment to make up the difference. If you do not have these additional funds, this may prevent the transaction from moving forward. Don’t forget that the max purchase price may be different for each town that you are considering. It is helpful to know this while you are searching for a home.