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The new year will bring higher loan limits for FHA mortgages.The Federal Housing Administration, or FHA, announced the new loan limits for 2019, raising the caps in the majority of the country to $314,827 from $294,515. For high-cost areas, the ceiling is raised to $726,525 from $679,650.

These changes will go into effect on Jan. 1, 2019.

In lockstep with higher conventional mortgage rates, more than 3,000 counties will get the 7 percent boost for FHA loans, while 181 counties will remain unaffected by the changes.

Limits are set per the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, which mandates that the FHA must calculate loan limits based on median home prices by metro area.

This is good news for borrowers hoping to crack the current housing market with an FHA-backed mortgage. The higher limits coupled with cooling prices in many areas of the country might help FHA borrowers in 2019.

FHA raises reverse mortgage limits

FHA-insured Home Equity Conversion Mortgages (HECMs), also known as reverse mortgages, got a jump in limits, too.

The FHA raised the limits on HECMs to $726,525 from $679,650. This increase is 150 percent of the loan limits for both Fannie Mae and Freddie Mac, which will tick up to $484,350 in 2019.

“FHA’s current regulations implementing the National Housing Act’s HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county; instead, the single limit applies to all mortgages regardless of where the property is located,” according to a statement by the FHA.

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