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
When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.
There are many questions about the official FHA loan rules for occupancy for single-family home loans. According to FHA rules, a borrower must occupy the home purchased with a single-family FHA loan as a personal residence as a condition of loan approval.
After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo
The FHA has announced it would accept electronic signatures (also known as e-signatures) on several FHA home loan documents. The new policies are found in detail described in FHA Mortgagee Letter 14-03.
Some of your FHA loan closing costs may be financed, and some may--after being negotiated between buyer and seller--be paid by the seller within the boundaries of the FHA loan programís rules. The borrower can also pay some closing costs out of pocket.