Summary: The maximum FHA loan amount for Seattle, Washington is $592,250, in 2017. That’s for a single-family home. The median home price in the area has now risen to around $640,000.
The Federal Housing Administration (FHA) loan program is one of the most popular mortgage programs today, accounting for nearly one-fourth of all loan volume based on a recent analysis. The program is particularly popular among first-time home buyers. In fact, the vast majority of these loans go to people who are buying their first house.
Borrowers often ask: What’s the maximum FHA loan for Seattle in 2017? This will depend on several factors, including your current income and debt situation. But there are also some official “loan limits” you should know about, as they can affect your borrowing capacity.
Here’s an updated look at the maximum FHA loan amount for Seattle, Washington, and how it stacks up to current home prices.
Maximum FHA Loan Amount for Seattle
The Department of Housing and Urban Development (HUD) manages the FHA mortgage insurance program. HUD establishes all of the official guidelines and requirements for the program, including the maximum loan amount.
FHA loan limits vary by county and are based on median home prices. In Seattle, the limit is currently set at $592,250 for a single-family home. There are higher limits for multi-family properties like duplexes and triplexes. This applies to the entire Seattle-Tacoma-Bellevue metropolitan area, including King, Pierce and Snohomish counties.
That’s the maximum FHA loan amount for Seattle in 2017. But it doesn’t mean you’re limited to purchasing a house at or below that price. You could buy a home with a purchase price above this amount just by making a larger down payment.
According to HUD, the minimum down payment for an FHA loan in Seattle is 3.5% of the purchase price or appraised value. This means you could finance up to 96.5% of the home’s purchase price. But if you buy a house in Seattle that’s significantly higher than the maximum FHA loan amount, you might have to put more money down.
Home Prices in the Metro Area Continue to Rise
So how does the maximum FHA loan size for Seattle compare to home prices? After all, the official limits are based on median home values. So how do they stack up?
The current loan limits for 2017 were established at the the end of last year. House prices in the Seattle metro area have risen quite a bit since then. As a result, the median home value as of April 2017 is now higher than the maximum FHA loan limit.
Earlier this month, the real estate data company Zillow reported that the median home price in Seattle had risen to $638,100. That was an increase of 12% from the same month last year, and prices are still rising across the metro area. (This was one of the top real estate trends for Washington State we covered a couple of weeks ago.)
So, as the year goes on, FHA borrowers might have to look harder to find a suitable property that falls within the loan limits mentioned above — or else make a larger down payment. And with the general consensus being that Seattle home prices will continue rising over the coming months, a strong case could be made for buying sooner rather than later.
Let’s talk: Would you like to know the maximum FHA loan amount you qualify for? Contact our staff for help. We can review your financial situation and let you know how much you’re able to borrow.