FHA and the high cost of ownership in Sacramento

The US Department of Housing and Urban Development (HUD) has announced new loan limits for FHA-backed loans. Because of the high cost of home ownersihp in Sacramento relative to the rest of the country (but still lower than most other major metro areas in California), Sacramento has been designated a "high cost" area and therefore qualifies for even higher FHA-backed loan limits.

While FHA loans fell out of favor during the frenzy of the rising market, as the local housing market has slowed these loans will probably become more common again. These loans require a prospective borrower to meet certain down-payment requirements, but are generally easier to get for those with credit issues. Even so, income requirements exist and not all borrowers will qualify for the new maximums which are:

• $362, 790 for a single-family home
• $446,190 for a duplex or two houses on one lot
• $542,100 for a three-family dwelling
• $625,500 for a four-family dwelling
  

All of this is good news for those looking to buy in neighborhoods like downtown and Midtown because of the higher relative purchase price compared to other areas in Sacramento.

I'm not a lender and I encourage anyone with questions to contact their lender directly. If you don't have a lender, I'd be glad to provide the names of a couple lenders that would be glad to answer any questions you have. ♦

» You can visit the HUD website here or read the loan limit announcement here.
» As always, you can email Rob here.