The Federal Housing Administration (FHA) has announced new mortgage loan limits for high cost areas. These new loan limits will have a very positive effect on homeowners seeking a lower, fixed interest rate.
In certain high cost counties in New York, New Jersey, California and other states, the FHA new loan amounts have been raised to as high as:
$729,750 for a single familiy home.
$934,200 for a 2-family home.
$1,129,250 for a 3-family home
$1,1403,400 for a 4-family home.
These higher limits will allow borrowers who traditionally had to take out a jumbo mortgage to refinance at a much lower interest rate.
This new FHA policy change should help many homeowners who need to refinance but normally would not qualify for a conventional mortgage. This also allows people that have more expensive homes and have fallen behind on their mortgage payments to use the new FHA secure program.
The increase to the FHA loan limits will increase the liquidity in the secondary markets. This makes it easier for lenders to sell larger loans and makes it easier for the consumer to obtain financing.
New FHA loan limits will help many homeowners to buy the homes that they want at the interest rates they desire. FHA loans are often used for first time homebuyers or for consumers who don't exactly fit the conventional loan guidelines. Therefore, ask your mortgage professional whether an FHA loan is right for you.
For those parts of the country that are not in high cost areas according to FHA guidelines, the single family loan limit floor has been increased from $200,160 to $271,050. So if you qualify you can now use FHA financing to borrow up to $271,050 on a single family home no matter where you live. Here are the loan limits that apply if your home is not in a high-cost area:
$271,050 for a single family home.
$347,000 for a 2-family home.
$419,400 for a 3-family home.
$521,250 for a 4-family home.
Contact your mortgage professional to determine the loan limits in your area and to see if FHA financing might be right for your situation.
These increases were part of the Economic Stimulus plan Congress passed early in 2008. These increases are temporary and will only last until the end of 2008 unless Congress acts to make them permanent.