Since the shake-up of the mortgage industry, the Federal Housing Administration (FHA) has again become one of the primary sources of financing available to responsible, qualified borrowers.
Recently, the U.S. Congress has reinstated a higher loan limit formula for FHA loans, after letting these higher limits expire in October 2011. Doing so will aid the stagnant upper-middle range home market which is contributing to the decline in home values. Qualified buyers can again borrow up to 125% of area’s median home price. In more affluent areas the maximum loan amount is capped at $729,750. These new loan limits will be available through 2013.
This is great news for home buyers who have good credit and can afford a home in the upper-middle price ranges of most communities, but either fall short of having enough cash for a conventional loan down payment of 20%, have been reluctant to pay a higher interest rate on a non-conforming jumbo loan, or cannot qualify for payments on a higher interest rate loan. FHA loans only require a down payment of 3.5% of a home’s purchase price.
These new loan limits are for FHA loans only. Loan limits for Fannie Mae and Freddie Mac insured mortgages will remain at 115 percent of local area median home prices, up to $625,500.
Recently, the U.S. Congress has reinstated a higher loan limit formula for FHA loans, after letting these higher limits expire in October 2011. Doing so will aid the stagnant upper-middle range home market which is contributing to the decline in home values. Qualified buyers can again borrow up to 125% of area’s median home price. In more affluent areas the maximum loan amount is capped at $729,750. These new loan limits will be available through 2013.
This is great news for home buyers who have good credit and can afford a home in the upper-middle price ranges of most communities, but either fall short of having enough cash for a conventional loan down payment of 20%, have been reluctant to pay a higher interest rate on a non-conforming jumbo loan, or cannot qualify for payments on a higher interest rate loan. FHA loans only require a down payment of 3.5% of a home’s purchase price.
These new loan limits are for FHA loans only. Loan limits for Fannie Mae and Freddie Mac insured mortgages will remain at 115 percent of local area median home prices, up to $625,500.
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