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68 68 68 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal FHA ISSUES FORWARD AND REVERSE LOAN LIMITS FOR 2023 e Federal Housing Administration (FHA) has announced new loan limits for calendar year 2023 for its Single-Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs. Loan limits for most of the country will increase in the coming year due to house price appreciation during the first half of 2022, which is factored into the calculations the FHA uses to determine the limits each year. "e loan limits announced today reflect steep increases in home prices throughout much of the country and will ensure continued access to FHA-insured mortgage financing despite those increases," Assistant Secretary for Hous- ing and Federal Housing Commissioner Julia Gordon said. e new forward mortgage loan limits are effective for FHA case numbers assigned on or after January 1, 2023: Note that mortgage limits for the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands are adjusted by the FHA to account for the high costs of construction in those areas. e maximum loan limits for FHA forward mortgages will rise in 3,222 counties, while in just 12 U.S. counties, FHA's loan limits will remain unchanged. By statute, the median home price for a Metropolitan Statistical Area (MSA) is based on the county within the MSA that has the highest median price. e HECM/reverse mortgage maximum claim amount will increase from $970,800 in cal- endar year 2022 to $1,089,300, effective for FHA case numbers assigned on or after January 1, 2023. is maximum claim amount applies to all areas, including the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands. e FHA is required by the National Hous- ing Act (NHA), as amended by the Housing and Economic Recovery Act of 2008 (HERA), to set single-family forward mortgage loan limits at 115% of area median house prices for a particular jurisdiction, subject to a specified floor and a ceiling. In accordance with the NHA, FHA calculates forward mortgage limits by MSA and county. e NHA requires FHA to establish its floor and ceiling loan limits based on the national conforming loan limit set by the Federal Housing Finance Agency (FHFA) for conventional mortgages owned or guaranteed by the govern- ment-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac. e national conforming loan limit for 2023 for a one-unit property is $726,200. FHA's 2023 minimum national loan limit floor of $472,030 for a one-unit property is set at 65% of the national conforming loan limit. is floor applies to those areas where 115% of the median home price is less than the floor limit. Any area where the loan limit exceeds this floor is considered a "High-Cost Area." In these High-Cost Areas, the FHA establishes varying loan limits above the floor based on the respective median home prices in each area. e NHA requires the FHA to set its maximum loan limit ceiling for high-cost areas at $1,089,300, which is 150% of the national conforming loan limit. Forward mortgage limits for the special exception areas of Alaska, Hawaii, Guam, and the U.S. Virgin Islands are adjusted further by FHA to account for the high costs of construction in those regions. Additionally, the FHA-insured HECM maximum claim amount is calculated at 150% of the Freddie Mac national conforming limit of $726,200. FHA's current HECM regulations do not allow the HECM limit to vary by MSA or county; instead, the single HECM limit applies to all HECMs regardless of where in the United States the property is located.