Long Beach, Ca.  Real Estate agents and home buyers need to understand the implications of the new FHA loan limits as spelled out below.  Sometimes this can be a little confusing with FHA loan structure so let’s analyze a couple of examples. 

First, understand that the FHA loan limit is based on the sales price minus the required 3.5% down payment and does not include the required Mortgage Insurance Premium (MIP) of 1.75% which is usually financed on top of the base loan amount.

Second,  Remember that if your base loan amount is above the old conforming loan limit of $417,000.00 then you will be subject to JUMBO FHA pricing which normally costs between .5% and .75% more then conforming rates.

For example,  if your sales price:             $432,124.00

Down pay ment would be(3.5%):              $15,124.00

Base Loan Amount:                                $417,000.00  (This is a conforming FHA Loan)

Add the MIP Fee(1.75%)                         $7298.00

Your Total Loan Amount                                   $424,298.00*

Even the total loan is greater then $417,000.00, it is not considered an FHA Jumbo because the mortgage limits are related to the base loan amount.

New FHA Mortgage Limits

The American Recovery and Reinvestment Act of 2009 (Recovery Act), signed into law on February 17th, 2009, provides for new FHA Mortgage Limits, effective March 6, 2009.  These new limits are calculated at the higher of the previous 2008 loan limits or the 2009 loan limits implemented by the Housing and Economic Recovery Act (HERA).

The new loan limits have been implemented and effective in the Mortgage Pricing System’s products since March 6, 2009. Current clients of Mortgage Pricing Systems can be confident in accurate qualification and pricing of FHA products. If you are not a client of Mortgage Pricing Systems, you must check with your Product and Pricing Eligibility provider regarding the status of this required change to FHA loan qualifications.

Loan limits vary by county and can be reveiwed at:

https://entp.hud.gov/idapp/html/hicostlook.cfm.

The new maximum loan limits are as follows:

New 2009 FHA                   48 States                   AK and HI

1-Family                         $   729.750                 $ 1,094,625     

2-Family                         $   934,200                 $ 1,401,300

3-Family                         $ 1,129,250                $ 1,693,875

4-Family                         $ 1,403,400                $ 2,105,100

Kirk Mulhearn, a Long Beach real estate broker manages, “The Bixby Knolls Office,” of Prudential California Realty and co-manages a GEM Mortgage net branch which specializes in originating FHA, VA, and Conventional Financing.You may contact him at:  532-989-4608  ext. 110

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