A loan officer covers 2 counties in 2026, one rural and one in a high-cost metro, and needs the FHA limit for each. For standard one-unit limits in the contiguous states, what percentage floor and ceiling bracket FHA county limits relative to the baseline conforming limit?
Correct Answer
D) The floor is 65% of the conforming limit and the ceiling is 150%
D. The standard one-unit floor is 65% and ceiling is 150% of the national conforming baseline. Mortgagee Letter 2025-23 supplies these percentages for 2026 Title II forward loans. For one unit it publishes a $541,287 floor and $1,249,125 ceiling. A county may have a limit between them; use HUD’s applicable location lookup. Scope and exceptions: These are not HECM maximum claim amounts or a guarantee of borrower eligibility. Special-exception locations and multi-unit properties have different dollar limits. The letter applies to case numbers assigned on or after January 1, 2026; do not reuse its dollars for later years without verification. Source: Mortgagee Letter 2025-23, pages 1–3 — https://www.hud.gov/sites/dfiles/hudclips/documents/2025-23hsgml.pdf
Why This Is the Correct Answer
D. The standard one-unit floor is 65% and ceiling is 150% of the national conforming baseline. Mortgagee Letter 2025-23 supplies these percentages for 2026 Title II forward loans. For one unit it publishes a $541,287 floor and $1,249,125 ceiling. A county may have a limit between them; use HUD’s applicable location lookup. Scope and exceptions: These are not HECM maximum claim amounts or a guarantee of borrower eligibility. Special-exception locations and multi-unit properties have different dollar limits. The letter applies to case numbers assigned on or after January 1, 2026; do not reuse its dollars for later years without verification.
Why the Other Options Are Wrong
Option A: The floor is 50% of the conforming limit and the ceiling is 125%
Neither percentage matches the published bracket.
Option B: One national FHA limit applies, set at 95% of the conforming limit
There is no single 95% county limit under this framework.
Option C: The floor is 80% of the conforming limit and the ceiling is 100%
It substitutes an incorrect floor and ceiling.
Exam Tip
Learn the floor/ceiling framework, then verify year, location and unit count.
More Mortgage Knowledge Questions
In a closing-readiness check, a risk reviewer sees facts tied to TILA Truth in Advertising. What should the file reflect?
In a training scenario, a trainee asks which official source controls FHA single-family origination policy. What action best follows the rule?
A compliance analyst compares the file facts with LTV Ratio Calculation during a licensing team review. Which conclusion is accurate?
A branch manager asks about a loan file because a trainee asks which official source controls FHA single-family origination policy. What should happen?
The loan team compares the file facts with ARM Cap Structures during a borrower follow-up call. Which conclusion is accurate?
A borrower has a 30-year fixed-rate mortgage with monthly principal and interest of $1,450. Property taxes increase, and taxes are paid through escrow. What can happen to the total monthly payment?
A loan has an outstanding principal balance of $240,000 and a 6% annual interest rate. Using simple monthly accrual, how much interest accrues for one month?
An annual escrow analysis for a current borrower shows a $780 shortage. One month's escrow payment is $600. The servicer elects to require repayment over the shortest installment period permitted by Regulation X for this shortage. What schedule is permitted?
What does an amortization schedule show for each scheduled payment?
A monthly principal-and-interest payment is $1,800, of which $1,250 is interest. How much principal is paid that month?
People Also Study
Federal Mortgage-Related Laws
24% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
During a state-law refresher, a state compliance officer identifies an issue involving USDA loan-program requirements. Which response is most compliant?
Next Question
A conventional borrower with 22% equity asks to waive escrows on a loan that is not higher-priced. The lender charges 0.25 points for the waiver. Assuming no other federal or state escrow requirement applies and the investor permits it, may the lender offer this priced escrow waiver?