The Department of Housing and Urban Development (HUD) has published the 2016 FHA loan limits for the Dallas / Fort Worth metro area.
In response to rising home prices across the DFW metro area, HUD has increased the FHA loan limits for Dallas in 2016. This means home buyers who use the program to buy a house have more leeway in terms of their maximum mortgage amount.
In 2015, the maximum FHA loan limit was $310,500. In 2016, the limit will be raised to $334,650. That represents a one-year increase of $24,150.
The 2016 FHA Loan Limits for Dallas / Fort Worth
As mentioned above, the 2016 FHA loan limit for the Dallas-Fort Worth area is $334,650. That’s for a single-family home. Here are the maximum mortgage lending amounts for all four property categories:
Notes: The “1-family” column shown above pertains to single-family homes. The other three columns are for multi-family / multi-unit properties (duplex, triplex, etc.). These limits apply to all cities with Dallas County, as well as the broader Dallas-Forth Worth Metroplex.
The FHA loan limits shown above were announced by HUD on December 9, 2015. They take effect on January 1, 2016 and they will remain in effect through the end of the year.
FHA loan limits are set at the county level. So the numbers shown above apply to all cities within Dallas County. They also apply to other counties within the DFW metro area, including Collin, Denton, Ellis, Hood, Hunt, Johnson, Kaufman, Parker, Rockwall, Somervell, Tarrant and Wise counties.
Home Price Gains Led to an Increase in Mortgage Amount
According to the Department of Housing and Urban Development, FHA loan limits are partly determined by median home values in a particular county. This means that when home prices increase significantly from one year to the next, loan limits are often increased as well. And that’s exactly what happened in Dallas from 2015 to 2016.
House values across the Dallas metro area rose by double digits in 2015. In fact, prices are now higher than they have ever been before — even during the housing bubble. This is the primary reason why HUD increased the Dallas FHA loan limits for 2016.
According to the real estate information company Zillow, home values in Dallas rose by approximately 16% during 2015. This is based on their proprietary Zillow Home Value Index, or ZHVI. Other sources report year-over-year gains ranging from 10% to 12%. But regardless of what source you look at, the general consensus is that home prices in the Dallas area rose significantly in 2015. Hence the higher loan limits for 2016.
According to the Real Estate Center at Texas A&M, the average price for a single-family in North Texas rose to $256,322 in November 2015, compared to a year earlier. That marked a one-year increase of 8%. But the average was still well below the 2016 FHA loan limit of $334,650.
This means home buyers who use the FHA loan program should be able to afford a moderately priced home within the Dallas real estate market. And this is intentional. By design, the FHA program is intended to help buyers purchase a moderately priced home. The program is not, however, designed for buyers who are shopping at the upper end of the price spectrum.
The bottom line is that Dallas home buyers who use the FHA program in 2016 should have plenty of homes choose from, as far as price range goes.
If you have questions about the 2016 FHA loan limits for Dallas, or about how these maximum lending amounts are determined, please refer to the Department of Housing and Urban Development’s website at HUD.gov. You can also find additional information on this page of LoanLimits.org.
Disclaimer: We make every effort to ensure the accuracy of the data and information we report. But there is always a chance for human error, typos, etc. Thus, we recommend that you visit the official source for all matters relating to the FHA program. That would be the Department of Housing and Urban Development.