We have some breaking news on the mortgage front. FHA loan limits for the entire Seattle-Tacoma-Bellevue metro area will soon go up by more than $70,000.
Starting in January 2018, the new maximum FHA mortgage amount for the Seattle-area counties of King, Pierce and Snohomish will increase to $667,000. This follows a similar increase for conforming loan limits, which we wrote about in November.
Maximum FHA Size for Seattle-Tacoma-Bellevue Area
During the first week of December, the Department of Housing and Urban Development (HUD) sent out a series of news alerts and letters stating they would increase the maximum FHA loan limits for most counties across the U.S., effective on January 1, 2018. The housing agency is making these changes as a direct result of rising home prices.
According to a related news release from HUD:
“In high-cost areas of the country, FHA’s loan limit ceiling will increase to $679,650 from $636,150. FHA will also increase its floor to $294,515 from $275,665. Additionally, the National Mortgage Limit for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $679,650 from $636,150.”
In most parts of the country, house values climbed steadily throughout 2017. The Seattle metro area, in particular, has experienced signifiant price growth over the last year. These trends have prompted federal housing officials to raise the maximum FHA loan amount for Seattle, Washington and most other cities across the U.S.
In and around Seattle, the max FHA loan limit for a single-family property will rise from $592,250 in 2017, up to $667,000 in 2018. That’s an increase of $74,750, which is pretty large for a year-over-year limit increase.
The rest of Washington is a mixed bag. The maximum loan amounts vary by county, because they are based on median home values which also vary regionally. In 2018, the single-family FHA limit in Washington State will range from $294,515 (in most counties) to $667,000 in the Seattle area.
These new maximum loan sizes will affect FHA-insured mortgage loans with case numbers assigned on or after January 1, 2018. They will remain in effect through December 31, at which time they will be reviewed again.
Most Other Loan Requirements Will Stay the Same
The FHA loan limits for Seattle and most other parts of Washington will go up in 2018. That’s good news for borrowers who are thinking about using this mortgage program, especially when you consider the rapid home-price gains occurring in the area.
But there’s more good news on this front. The low down payment associated with this program should stay the same next year. Borrowers who use an FHA loan to buy a house in Washington State must make a down payment equaling 3.5% of the purchase price or appraised value.
HUD has not made any preliminary announcements about changing this requirement, so it will likely remain the same throughout 2018. The same goes for other requirements associated with the FHA mortgage insurance program.
Aside from the loan limits increases mentioned above, it seems that the status quo will carry over to 2018. We will publish additional updates on our blog if any other changes do occur.