What does the FHA extended loan limits mean for Buyers?

By
Managing Real Estate Broker with REIGN REALTY

Believe it or not, there are some buyers still unclear as to what an FHA loan is, and how it can benefit them when purchasing a home.

Read my attempt to be candid as to what it is, what is going on with it today, and how it can help.

Well, let's see...say you are contemplating purchasing a new home, and you see alot of upgrades you want in your new home.  Of course this will increase the price of the house by as much as the cost of the items.  Agree?

Now, lets say, your cost is $275k. At current loan limits (depending on which county you live), you can only fund up to the maximum of 115% of your local area median home price (you can find this info on the census website, or from a Realtor). In Mecklenburg county (Charlotte, NC), the maximum loan limit (what the banks will lend you on a single purchase) is $271k.  This would me, if you are purchasing real property in the Charlotte area, you can only be funded up to $271k, making you have to pay the balance of $4k as your down payment.

There is a legislative bill, H.R. 2112, that just yesterday had an FHA amendment approved by the Senate.  If voted favorably upon by the Senate and House (hopefully next week), the FHA loan limit would allow the maximum loan limit to increase to 125% of local area medium home price.  This would increase loan limits to $303k!  (Whoo Hoo, you get to add more upgrades to your house), increase your loan, decrease your down payment, and get all that you want mostly financed.

This is all, of course, depended on the fact that you have applied, and been approved for an FHA insured loan product (which by the way requires a minimum of 3.5% down payment, mostly protects the borrower).  

Feel free to go to the FHA website to learn more about their products.

As of yesterday, the loan limits have not increased.  But I got my radars up.  As soon as I learn of the status change, check back here (or my Twitter page) for an update.

If after reading about FHA mortgage insured products you are ready to talk to me and purchasing, give me a call, I am here to help!

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Raine Spivey is a Broker at Reign Realty in Charlotte, NC - A residential, and commerical full service real estate brokerage . All expressions made are solely the responsibility of Raine. If you have any questions you'd like Raine to answer, send your questions to RealtorRaine77@Gmail.com.  

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Home Buying
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North Carolina Mecklenburg County Charlotte
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