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FHA Loan Limits in Maricopa County Arizona

By
Real Estate Agent with Realty One Group of Scottsdale, AZ

Maricopa County - including Phoenix, Scottsdale, Cave Creek, Fountian Hills, Glendale, Mesa, Gilbert, Chandler and the remaining Valley of the Sun - is given fair warning.  FHA Loans which are often the best option for 2011 homebuyers looking to minimize their downpayment could see FHA loan limits being reduced from $346,250 to $271,050!!  This porbable change is set to occur October 1, 2011.  A 3.5% downpayment for Arizona Real Estate is looking more and more like a luxury for most home buyers, take advantage now or don't say I didn't warn you!

Take a look at the article below from the U.S. Department of Housing and Urban Development.  Early signs are that this will be leading to a even greater demand for the low supply of homes currently priced between $280-360,000.  The Phoenix area is experiencing a drastically differenet market from the past few years and the supply of homes is greatly reduced, especially move-in ready homes.  If you are considering a real estate purchase in Scottsdale, Cave Creek, Chandler, Gilbert or greater Phoenix in this price range I'd suggest you act now and buy your new home this summer before supply is even further depleted this fall.

Barring Congressional action, Federal Housing Administration (FHA) loan limits will revert
back to loan limits determined under the Housing and Economic Recovery Act (HERA) for loans
insured by FHA on or after October 1, 2011. As a result, FHA loan limits would likely decline
in 669 of the 3,334 counties or county equivalents that are eligible for FHA insurance. A
complete list of FHA loan limits for the 669 potentially affected counties and county equivalents
is provided in Table 1of this Market Analysis Brief. The remaining 2,665 counties are unlikely to
experience a change in loan limits. This Market Analysis Brief discusses the location and impact
of the potential loan limit declines as initial guidance to the industry and consumers. Additional
information and analysis may be shared in the coming months.
FHA loan limits restrict the size of mortgages that can be insured by the Federal Housing
Administration (FHA). Prior to 2008, the National Housing Act, as amended in 1998 Mortgagee
Letter 1998-28, required that FHA mortgage limits be set at 95 percent of the median house price
in that area. However, FHA loan limits could not exceed 87 percent or go lower than 48 percent
of the conforming mortgage limit established by the Government Sponsored Enterprises (GSE)
in any given area. For the high-cost states and territories (Alaska, Guam, Hawaii, and the Virgin
Islands), the National Housing Act allowed mortgage limits to be 150 percent of the national
ceiling.
To mitigate the effects from the economic downturn and the sharp reduction of mortgage credit
availability from private sources, Congress temporarily increased FHA loan limits in 2008. The
Economic Stimulus Act (ESA) enacted in February 2008 stipulated that FHA loan limits be set
temporarily at 125 percent of the median house price in each area.1 The FHA loan limits could
not exceed 175 percent of the 2008 GSE conforming mortgage limit of $417,000; nor be lower
than 65 percent of the same 2008 GSE conforming loan limit for a residence of applicable size
for any given area. Also, ESA stipulated that mortgage limits for Alaska, Guam, Hawaii, and the
Virgin Islands be adjusted up to 150 percent of the national ceiling.
1 ESA loan limits apply to all FHA mortgages endorsed beginning March 1,2008 under the following sections of the
National Housing Act: Section 203(b) FHA's basic 1-4 family mortgage insurance program, Section 203(h)
Mortgages for disaster victims, Section 203(k) Rehabilitation mortgage insurance, Section 203(c) Condominium
units, and Section 203(e) Property in declining areas.

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Hi, I'm Jason and I specialize in ARIZONA REAL ESTATE INVESTMENTS.  Whether it's your primary home and residence or a purely strategic purchase, I'll ensure your purchase, sale or lease takes advantage of every financial opportunity.  Any real estate purchase is a significant investment and you want to make sure you are getting solid, experienced advice from someone who knows the market as well as your individual needs.  Call or email me today so we can get started!

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