Photo provided by Dekuwa on Flickr
Happy New Year everyone!! I have taken a little bit of time off from posting throughout the holidays, but I am back. I hope everyone had a great holiday season and a Happy New Year!
I posted a few weeks back about changes to FHA in 2009, but I did not include the change to the maximum loan limits imposed on FHA financing in that post. I wanted to take some time to share with you the changes that occurred yesterday, January 1, 2009 for FHA loan limits.
On November 10, 2008 HUD issued a press release about the loan limit changes for 2009. In this release HUD explained
FHA will insure single-family home mortgages up to $271,050 in low cost areas and up to a maximum of $625,500 in high cost areas
This was a change back to more normal FHA loan limits since the Stimulus package in February 2008 increased them to help create more opportunities in the housing market. Although the FHA loan limits have come back down from where they were at during the stimulus package, the maximum FHA loan amount of $625,000 is much higher than the previous maximum of only $362,790.
The loan limits are based on the county you live in. To check out the limits in your area, check out HUD’s page for Loan Limits.
Conventional Loan Limits
Conventional mortgage loans also have maximums, which for 2009 will go unchanged at $417,000. Fannie Mae issued their own press release on November 7, 2008 stating,
The national limit was left unchanged at $417,000 based on declines in FHFA’s [The Federal Housing Finance Agency] monthly and quarterly house price indexes over the past year. The monthly purchase-only index declined 5.9 percent over the 12 months ending August 2008, and the quarterly all-transactions index dropped 1.7 percent from second quarter 2007 to second quarter 2008. Virtually every other measure of house prices has also fallen, with many showing even larger declines.
Mortgages Over Limits
Although FHA and Conventional mortgagees have loan limits, there are mortgage options for those looking to obtain mortgage financing in excess of these amounts. The guidelines for such mortgage loans are typically more strict, require more money down and have higher interest rates as copared to FHA or Conventional options.
I wish everyone a Happy New Year!
Lending a Hand,
Scott Wynn
Tags: FHA
