FHA Loan Articles
Higher FHA Loan Limits for High-cost Counties
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.