New FHA Loan Limits
Now is a great time to buy or refinance a home. The FHA has been working with the federal government to try to help homeowners purchase and retain their homes through programs like FHA Secure. FHA Secure was enacted by the government in order to allow people a way to refinance their homes at lower interest rates and avoid default and foreclosure if they have adjustable rate mortgages. The FHA has saved many homeowners from foreclosure by allowing them to refinance even if they were in default with their current home loan.
Now the FHA has gone one step further to come to the aid of homeowners as a result of the Economic Stimulus Act of 2008. This act allows for the FHA home loan limits to be temporarily increased in order to help stimulate and stabilize the U.S. housing market.
New Benefits of FHA Loans
Here are some facts on how the new Economic Stimulus Act of 2008 is allowing the FHA and HUD to help more homeowners:
- This act went into effect as of March 6, 2008 and allowed the FHA to increase the loan limits for people who qualify for guaranteed loans through the FHA and people who are refinancing their loans through the FHA.
- Before this act the FHA loan maximum limit was $362,790, and now those limits have been increased to anywhere between $271,050 and $729,750.
- The amount that a borrower can qualify depends on the geographic location of the home they are trying to purchase. The maximum of $729,750 applies to large metropolitan areas where the cost of living is higher and therefore the cost of affordable housing is higher.
- The FHA will determine the limit for specific geographic areas by looking at commercial data and government data that will indicate the price of housing and affordable range for each area.
- This loan limit increase will allow the FHA to offer loans and refinancing options for close to 240,000 more homeowners and potential buyers who want to purchase their homes with an FHA guaranteed loan.
Check back with us for more updates regarding the FHA programs in the near future. If you for some reason find that you cannot qualify for a VA Loan, our specialists will be more than happy to discuss your options when it comes to another great government program - the FHA.
