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New FHA loan limits for 2009 - Fact or Fiction??

fha loans & fha mortgages

HUD announced MORTGAGEE LETTER 2008-36 on November 7, 2008 for the new FHA loan maximum mortgage limits. My main concern is that the correct information is put out there for all to read. I have read a few blogs in the last few days that state that the mortgage under the current loan limits have to close or fund by January 1st, 2009, when this goes into effect. Fiction : This is not true by FHA's standards, but could be that of the lender that is putting that information out there.

In regards to the new FHA maximum mortgage limits, you have to have a FHA case number and credit approval prior to January 1, 2009 in order to use the old FHA loan limits. The old FHA loan limits was all part of the Stimulus Bill signed into Congress back in February of 2008. The higher loan limits were suppose to help those refinance that were in higher rate mortgages, jumbo mortgages, or those with adjustable rate mortgages with high end balances.

How does one dissect the new loan limits in each county? I don't want to bore you and give you language such as language that you would find in a law book. You basically have what are called 'Ceiling' and 'Floor' limits. These limits are based on a certain percentage of the medium house price in that county. The ceiling limit is set at $625,500 and the floor limit is set at $271,050. In layman's terms, basically your highest loan amount and the lowest loan amounts that are allowed for FHA loans. There are special exceptions to where the FHA loan amounts can exceed the ceiling limits. The potential loan limit is $938,250 in parts of Alaska, Hawaii, Guam, and the Virgin Islands. These higher limits account for the higher construction costs.

So, if you are sitting on the fence about purchasing or refinancing and your loan amount would be higher than the new FHA maximum loan limits in 2009, then you better act quickly, or forever hold your peace.

For a better understanding of these new FHA loan limits or to find out what your new county limit may be, please don't hesitate to contact me. jbelonger@ihmci.com thanks, Jeff

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Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 11/12/2008 01:09 PM

Comments (18)

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Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: New FHA loan limits for 2009 - Fact or Fiction??

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18 Comments on New FHA loan limits for 2009 - Fact or Fiction??

NOV

2008

Short, informitive, important, I like it!

Let us pray that your advice to home owners and buyers is seen and heeded!

Bill

BILL...... thanks.. I read a few that even bored me to death... there is no need for mortgage jargin in a post..just my .02. thanks again...

Jeff: What do you see for the King County, Snohomish County and Pierce County limits for 2009 in the Seattle area?

Paul

Mr. McFadden.... you sir, don't follow instructions so easily, do you... lol ( I said e-mail me to find out... lol ) Seriously though, it will be $506,000 next year for all 3 counties. King County, Snohomish County and Pierce County -- Send me your e-mail and I'll send you the list... but that's not bad, that you dropped only about $61,000 in loan limits. I have seen some as much as 100k... in some of my local counties, I only saw a drop off of about $44,000. thanks

Great stuff, Jeff. I already alerted all my buyers and buyer prospects.

Jeff

Jeff D. ... I already send you an e-mail with all of the counties.. here are the high cost areas... or basically those that max out at the ceiling limits... and thanks for the compliment...

california counties

jeff belonger

I so so so hope they extend this "stimulus" stuff. What are the odds?

I guess they're making your job pretty difficult! But why don't they have a web site with an easy way to find each county?

NOV

2008

Jeff,

Thanks for the post and providing clarity on the issue. FHA is the best game in town, even if the stimulus portion is discontinued.

Jeff- you seem to have a handle or a finger on the pulse of all things lending, ... have you heard any word about Down Payment Assistance coming back in a different form

I have not come across these posts, but good call on clarifying.

NOV

2008

RENEE..... . not really sure about that. It seems to have fizzled slightly, ever since the 700 billion bailout took place and then the election. I am hoping to find out some more news today or Monday and I will keep you posted. thanks

LISA...... . it won't be on the web site until the first of the year, when it changes. If they did that now, you wouldn't know what the current limits are. ANyone that received the mortgagee letter also received 2 other attachments that shows all the counties, unless that specific county has the floor limit of $271,050.

WILLIAM..... . I think it's been the best game in town for the last 3 years.... and it was a better choice than many subprime loans back then. But one of the main reasons why it's becoming more widely used now is those that weren't FHA approved before have now taken that step. If not, they would be out of business... sad, but true.

JAMES...... . thanks, I appreciate that... and I try to stay on top of things. In regards to the seller funded DPA's, just as I explained to Renee in a comment above, I hope to know more in the next few days. thanks

JOHN..... . I did and some of the information is misleading. HUD clearly states when it has to be tagged and underwritten. What I mean by tagged is that the file needs a case number... and yes, some investors are requiring that you close it by 12/31/08, but that is not HUD.

Thanks for always making it clear and easy to understand.

NOV

2008

PATTY.... my pleasure and thanks for stopping by.

NOV

2008

Jeff, I had a conversation with a Mortgage Banker from a Large national bank. We were discussing the merrits of jumbo loans vs $417k conforming with a 2nd Trust deed and he said that the later will be more cost effective then any other loan including FHA, thought I will get your input.