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FHA "Announces" Potential Loan Limits Starting October 1st, 2011

By
Mortgage and Lending with Caliber Home Loans NMLS#284800

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. Potential Counties Affected October 1st 2011

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). San Diego County FHA Loan Limit Change

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.

California FHA Loans From 2010

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.

Posted by

 Kevin Kueneke, NMLS # 284800
San Diego County Mortgage Specialist
VA Mortgage Loan Specialist | FHA Mortgage Loan Specialist
Direct Lender | Mortgage Banker
Phone 760-500-1919 | Fax 619-419-2324

Visit My Website: kevinkloans.com 

Mann Mortgage LLC | NMLS #2550
11230 Sorrento Valley Road Suite 225| San Diego CA 92121

Comments (3)

John Saari
Worcester, MA
"The Mortgage Buddy"

Nice post Kevin. I personally don't like it but it needs to be done to make certain people are not buying too much house.

May 27, 2011 12:29 PM
Ricky Khamis
EPiQ Lending - Gilbert, AZ
NMLS 173141 | CADOC 173141 - 602-758-7425

I believe that this will not have a HUGE impact, however it is nice to be able to leverage your money properly.  Sometimes, not all the time, it make since to put less down.  If 20% basically wipes out all their liquidity then putting low down to stay liquid and buy a little less house makes more sense.

Great post Kevin.

May 29, 2011 05:38 AM
Kevin Kueneke
Caliber Home Loans - Encinitas, CA
San Diego Mortgage Banker

Personally, I think it makes more sense to lower the maximum debt ratios, not the loan limits.  Thanks for the comments.

May 29, 2011 04:01 PM