On February 13th the President signed the Economic Stimulus Act and FHA maximum loan limits were increased. So far what we know is:
- The max limit increased
- The floor is $271,050 (meaning low priced areas will have this cap on their FHA loan amount limits)
- The increase is for loans that are approved before the end of 2008
- The new limits will be the lesser of: * 125% median price of the area or $729,750
HUD has 30 days after enactment of the Economic Stimulus Act to define the median prices for each area and publish the new limits.
So....the areas with low median prices will go to $271,050. The areas with high median prices will go as high as $729,750. We have to wait to see what HUD makes the median prices for each area before we know what the exact amoutns are for each area of the country.
This means that you will see more and more loans going FHA this year, and fewer jumbo loans. This will be really good for certain areas of the country where loan amounts are frequently above the $500k-$600k mark.
Thanks,
Clint
**all views expressed are opinions of Clint Haynes
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