Congress Restores FHA Loan Limits to NAR-Backed Levels

The U.S. House and Senate yesterday restored FHA loan limits to the level they were at before they were allowed to expire at the end of September. As a result, the limits will rise to 125 percent of the area median home price from 115 Percent, up to a maximum $729,750, from $625,500. NAR estimates that several hundred counties where FHA loan limits fell at the end of September will now rise back up to the previous level.

“The reinstated loan limits will help provide much needed liquidity and stability to communities nationwide as tight credit restrictions continue to prevent some qualified buyers from becoming home owners and the housing market recovery remains fragile,” said NAR President Moe Veissi in a statement released last night.

President Obama is expected to sign the legislation shortly. The restored loan limits are in a broad-based bill that includes funding for a wide variety of federal operations and programs.

The maximum conforming loan limits for secondary mortgage market companies Fannie Mae and Freddie Mac also expired at the end of September, but lawmakers did not include a restoration of those limits in the bill. As a result, conforming loan limits will remain at 115 percent of the area median home price, up to $625,500.

Once President Obama signs the bill, the limits will go into effect. FHA will release a mortgagee letter to its approved lenders shortly. The mortgagee letter will contain a list that’s been updated to reflect the new limits. NAR analysts say it will take the agency a short period to update its database and release the mortgagee letter, maybe a couple of weeks.

The funding bill also extends the National Flood Insurance Program (NFIP) until December 16 to allow lawmakers time to consider long-term authorization of that program, which is an NAR priority.


Statement by NAR President Veissi.

FHA limits myths and facts.

Impact of declining loan limits.

Keep up pressure for long-term NFIP authorization.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. Do you know which states were excluded?

  2. Robert Freedman

    Marilyn, no states were excluded. It’s by county. Some counties were affected and some weren’t. I believe about 600 counties were affected. HUD will have the new loan limits in its database once President Obama signs the bill and HUD releases a mortgagee letter to its approved lenders announcing the restored limits. At that time, you can access HUD’s database of FHA loan limits to see what the limits are in your county. To access that database, you go to and in the search box type in “FHA loan limits.” When the page comes up, you type in your county and the loan limits are displayed.—Rob Freedman

  3. Mary Robbins

    This is just what the market needs to let people buy a nice comfortable home they can live in. When can we expect this new loan amount to take affect. I have a buyer who will now be able to purchase the home she wants now only because of this new loan amount.


    Mary Robbins.

  4. bobbyrenfro

    When weighing the difference between an FHA-insured loan and a conventional mortgage, homeowners should also consider the future of home prices and mortgage rates, check the 123 Refinance page for more

  5. Robert Freedman

    Mary, you can expect the new limits to be announced shortly, maybe in a week or two. I would check at regularly for an announcement.—Rob Freedman

  6. Dawn

    Letter To Editor: In the Jan./Feb. 2012 issue of Realtor Mag. I read a blog on the Readers page regarding the recent supprot by NAR to Congress on approving the higher loan limits for FHA loans. John from Blairstown NJ hit the nail right on the head and I too was NOT in support of this for exactly his reasons stated. In an editors note below John’s blog was a statement that we could read the “analysts” myths & facts regarding how this is so heavenly and how it benefits FHA insurance and the taxpayer! I searched for it and surprisingly, it is no longer available to read. I am esp[ecially interested to know how your analysts think this is a benefit to these two entities mentioned. Especially the taxpayer! LOL…very amusing NAR. Must be a joke…right? Appreciate a response so I too can sell the satire. Not expecting a response, but I will look for one nonetheless. Considering the dues I pay annually, a response should be available in a timely manner….???? Thank you, Dawn Shevlin

  7. Robert Freedman

    Thanks very much for your note. We recently changed the site, which might be why you couldn’t find the “Myths & Facts about FHA loan limits” document. You can access that here: I’m not in a position to speak to whether restoring the loan limits is a good or bad thing, but I hope the document is helpful. Best, Robert Freedman