Are you thinking about using an FHA loan to buy a home in the Seattle metro area in 2017? If so, we have two pieces of good news for you. FHA loan limits for the Seattle metro area have gone up, and the annual mortgage insurance premium is going down.
We reported on one of these FHA changes before. The insurance premium reduction was just announced earlier today. Here’s what you need to know about these two changes.
Seattle FHA Loan Limits Increased for 2017
In 2017, FHA home buyers in Seattle will be able to qualify for larger loans. That’s because the Department of Housing and Urban Development (HUD) has increased the official FHA loan limits for all of King County, Washington in 2017.
At the end of 2016, HUD announced that it would increase FHA limits for the Seattle metro area and most other parts of the country. This was done in response to home-price gains that occurred during 2016. The change took effect at the start of 2017, and it will remain in effect through the end of this year.
In 2017, the maximum loan limit for a single-family home in the Seattle metro area will go up to $592,250. That’s an increase of more than $50,000 from 2016, when it was capped at $540,500. This applies to the entire metro area, including all of King, Pierce and Snohomish counties.
Annual Mortgage Insurance Premium to Go Down
The second Seattle FHA loan change for 2017 has to do with mortgage insurance. Borrowers who use the Federal Housing Administration loan program to buy a house usually have to pay two different mortgage insurance premiums — an upfront premium, and an annual premium. And the annual premium is about to go down.
On January 9, HUD announced that it would reduce the annual mortgage insurance premium rate by 25 basis points, or 0.25%. Housing officials estimate that this could save FHA borrowers an average of $500 this year. The change will apply to most new mortgage loans with a closing / disbursement date on or after January 27, 2017.
Here’s a chart that accompanied the official policy letter, which was sent out earlier today. The reduced mortgage insurance premiums are listed under the “New MIP” column on the right.
According to HUD Secretary Julian Castro:
“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families. This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.”
These are positive changes for Seattle FHA home buyers in 2017. The higher loan limits mean buyers could have more properties to choose from, while staying within the allowable price range for an FHA loan. The lower mortgage insurance premiums will reduce the overall cost of the loan.
Contact Us to Apply for the Program
Would you like to use an FHA loan to buy a home in the Seattle area? We can help. Sammamish Mortgage has been serving home buyers across Washington State and the Pacific Northwest for more than two decades.
We are a local, family-owned mortgage company based in Bellevue, Washington. We offer competitive rates on a variety of products, including the popular FHA loan. Contact us today for a rate quote, or with any questions you have.