It’s a new year, and that means there are new FHA loan limits for Denver, Colorado. The maximum FHA loan size for the Denver metro area was raised to $529,000 in 2018 (a significant increase over last year’s limit of $493,350). That’s the cap for a single-family home purchase. There are higher caps for multifamily properties such as duplexes and triplexes.
Maximum FHA Loan Size for Denver: 2018 Update
Federal Housing Administration (FHA) home loans are insured by the government. There are limits to how much the agency is willing to insure, in terms of the maximum loan size. These limits are based on median home prices, which means they can vary from one county to the next.
At the end of 2017, the Department of Housing and Urban Development (HUD) announced that it would be increasing the maximum FHA loan size for Denver, Colorado in 2018. They raised the caps for most other cities across the country as well.
According to a HUD press release:
“Due to robust increases in median housing prices … the maximum loan limits for FHA forward mortgages will rise in 3,011 counties. In 223 counties, FHA’s loan limits will remain unchanged.”
Note: In this context, a “forward mortgage” is one that is used by a home buyer to purchase a property. This distinguishes them from “reverse” mortgages, which are used by homeowners to convert equity into cash.
Here are the maximum FHA loan amounts for Denver in 2018:
- One-family property: $529,000
- Two-family: $677,200
- Three-family: $818,600
- Four-family: $1,017,300
FHA loan limits vary by county and are generally the same across an entire metro area. So the maximum amounts shown above apply to the entire Denver-Aurora-Lakewood metro area. This includes the counties of Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.
If you’re a home buyer planning to use an FHA loan to buy a single-family property in the Denver area, the loan limit that applies to you is $529,000. This cap applies to the loan itself — not the total value of the property. These limits represent the most the Federal Housing Administration will insure. So, for a more expensive home, a larger down payment might be needed.
Home Prices Rising in Mile-High City
The official loan limits for FHA, VA, and conventional conforming mortgages are based on home prices. This means that when house values rise significantly during the course of a year, federal housing officials may increase maximum loan sizes as well.
This is what happened in Denver — and in most of Colorado — from 2017 to 2018. Rising home values prompted an increase in FHA limits for 2018.
According to the Denver Metro Association of REALTORS®, the median price for single-family homes sold in December 2017 was $412,500. That’s significantly less than the maximum FHA loan amount for the Denver area, which now sits at $529,000.
This means that home buyers in Denver who plan to use an FHA loan should have plenty of properties to choose from, without exceeding the maximum loan amount for that program. And that’s good news for borrowers.