We have heard that the current FHA Jumbo loan limits and Fannie/Freddie High Balance Conforming and Super Conforming loan limits will decrease after September 30, 2011. FHA finally put it in writing in their FHA Market Analysis Brief released yesterday.
In the article, FHA mentions that there are 669 potentially affected counties and county equivalents (major metropolitan areas). The smallest decreases will occur in four Ohio counties (Greene, Miami, Montgomery, and Preble) and one Texas county (Jeff Davis). These counties will see their maximums drop from $271,250 to $271,050. Seriously...?
However, the majority of "high limit" counties in Puerto Rico will drop by $221,000 from $606,250 to $385,250. The largest decrease ($250,750) will occur in Hawaii County from $618,750 to $368,000. California's Monterey County is a close 2nd with a potential decrease of $246,750 (from the current national maximum of $729,750 to $483,000).
For those purchasing a home using FHA insured financing in San Diego County after October 1st, 2011, the limit will drop by $151,250 down to $546,250 from the current level of $697,500. As shown in the chart below, although the percentage of CA FHA insured loans from 2010 that would have been affected is only 6%, the dollar volume that would have been affected would have been over $4.2 billion.
Personally, I close one FHA Jumbo in San Diego County for every four FHA conforming loans I close. Of those, about one out of four exceeds the potential new limit of $546,250. It will be interesting to see how this all unfolds as we approach the September 30th deadline.
Have any questions regarding FHA loans in San Diego County or anywhere in California? Call or email me today.
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