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FHA loan limits

This morning on CNBC they were talking about the existing home sales reports. The reports indicate that the housing market is in good shape for homes selling up to $250,000.00 after that there is little or no activity. Our local MLS stats support those statistics. I think our government should be looking at increasing the FHA loan limit to at least the conforming loan limit of $417,000.00. It seems to me that if we give people an opportunity to buy a home with great interest rates and a 3.5% down payment that would open a lot of doors. Does anyone have any idea how we can get NAR and congress to look at this idea?

Your comments would be appreciated.

Posted by Brad Nelson on 09/25/2009 10:11 AM

Comments (3)

FHA Loan Limits in the ActiveRain Channel

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3 Comments on FHA loan limits

SEP

Ahhh, we have $729,750 and think it's not high enough! Just goes to show the regional differences.

In part, FHA looks at the median home price and median incomes. FHA is designed for first time home buyers. You have to take a really serious look at a program if it considers $729,750 or even $417,000 as the price as for a first time home buyer. Do the math on the payment on a $700,000 loan.....they couldn't save any money for a down payment but they can qualify for the payment???

I doubt FHA will be raising their limits soon.

I have to take small exception with Kent's comment. FHA is not necessarily a first time buyer program. My first three homes were all financed with FHA 30 to 40 years ago. Currently 95% of my business is FHA and it is about evenly split with with first timers.

Kent is correct that if a buyer has enough income to purchase a $700,000 home and has no savings the underwriter will be asking why.

We have to get past the idea that FHA and VA are first time buyer programs. I took a refinance application last night for a $530,000 VA 100% refinance. The owners are both executives in a local casino and their combined income is over $200,000 a year. Wish I could do more of these.

And yes, I have Jumbo VA loans.

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