FHA Loan Articles
News, updates, and explanations to keep you informed.
Higher FHA Loan Limits for High-cost Counties
2011 has been an up-and-down year for FHA loan limits for the most expensive housing markets. According to press release HUD No. 11-170, "On October 1, 2011, the Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA). As a result, FHA will reduce loan limits in the highest cost metropolitan areas of the country while limits would remain unchanged in most other parts of the nation."
Hundreds of high-cost counties--about 670 of them across the nation--were affected by the announcement, but a recent article in the San Francisco Chronicle (published in one of those high-cost counties affected) reports those FHA limits will be reinstated to their previous, higher amounts due to congressional action.
According to the SF Chronicle, FHA loan limits for high-cost counties will increase to $729,750-but that change is only effective for FHA insured home loans, not for those issued under the Fannie Mae or Freddie Mac programs.
These FHA loan limits for high-cost counties, reinstated to their pre-October 1, 2011 levels, would remain in effect through 2013 according to the San Francisco Chronicle.
Borrowers in high-cost counties who seek an mortgage loan between $625,00 and the reinstated $729,750 limit basically have two choices, according to the article. The house hunter can choose an FHA mortgage loan or a jumbo loan issued by a private-market lender.
The SF Chronicle article states that interest rates are "perhaps 0.75 lower" than the private-market jumbo loan option. The private market option would be more aggressive in its credit score requirements and could feature larger down payment requirements than an FHA insured loan for the same transaction.
At the time of this writing, an official FHA press release was not available with additional information.
FHA NEWS and RELATED ARTICLES
Some borrowers come to the FHA loan process with a long credit history, while other borrowers are just getting started. Is it possible for a borrower be turned down for an FHA loan because of a lack of credit history?
The FHA Reverse Mortgage, also known as Home Equity Conversion Mortgages or HECM loans, is designed for those aged 62 and older who own their home outright or have few payments left on the mortgage.
When the Department of Housing and Urban Development announced the FHA’s Back to Work program, it was very good news for any potential FHA loan applicant who may have experienced previous financial hardship as a result of the recession.
When you apply for a new purchase FHA home loan, FHA loan rules say you must list your income and employment details. This lets your loan officer accurately determine your debt-to-income ratio, using calculations based on your verifiable income.
Do you need to buy a home using an FHA loan, but one that is out of town or out of state? The Department of Housing and Urban Development has created a new tool to help FHA loan applicants and anyone else looking for a home loan.