Today, HUD announced its new, enduring maximum loan limits for FHA Mortgages and FHA Refinance Loans that will become effective on Janurary 1st, 2009. These new maximum loan limits have been set as part of The Housing and Economic Recovery Act of 2008 and will be enduring limits.
Under the Housing and Economic Recovery Act of 2008 (HERA) , which approved in July 2008, the Federal Housing Finance Agency (FHFA) was established and directed to set conforming loan limits each year. The rules governing how the mortgage limits are established fluctuate from the rules set forth in the Economic Stimulus Act of 2008 (ESA), which applies to loans originated in 2008. For example, under ESA, mortgage limits for high-cost areas were set at 125 percent of Local house price medians and the maximum high-cost limit was 175 percent of the national conforming limit ($729,750 in the continental U.S.).
Starting January 1st, the nationalloan limit for one-unit homes in the lower 48 states shall be pegged to a house value index selected by the FHFA. The national loan limit for 2009 will continue at $417,000. In upcoming years, the fha refinance limit for any given area shall be set at 115 percent of the mean house cost in that area, as determined by HUD, except that the FHA finance limit in any given cannot exceed 150 percent of the Freddie Mac nationalmortgage limit, nor be lower than 65 percent of the Freddie Mac nationalmortgage limit.
This essentially creates the “Floor” and the “Ceiling” for the maximum FHA loan amount for a given region with the lowest maximum FHA mortgage amount being $271,050 in any region and the highest FHA mortgage amount being 625,500. Alaska, Hawaii, Guam and the USVI may be adjusted to 150% of these limits to account for higher costs.
The new FHA mortgage limits for 2009 are detailed below:
In areas where 115 percent of the median house cost is less than 65 percent of the Freddie Mac limit, the FHA limits are set at the 65 percent amount, i.e., the “Floor,” as follows:
One-Unit $271,050
Two-Unit $347,000
Three-Unit $419,400
Four-Unit $521,250
Any region where the limits exceed the floor is known as a high costregion. In areas where 115 percent of the median house price exceeds the 150 percent figure, the finance limits are set at the 150 percent amount, i.e., the “Ceiling,” as follows:
One-Unit $625,500
Two-Unit $800,775
Three-Unit $967,950
Four-Unit $1,202,925
For all other areas, i.e., those where 115 percent of the median home cost for the region is in between the floor and the ceiling, the limit shall be at 115 percent of the median home price.
These new FHA refinance limits could mean that the time might be right for you to ponder an FHA refinance loan or an FHA mortgage for your new home purchase. If you would like more information on FHA home loans or FHA refinance loans, www.fha-101.com.
Today, HUD announced its new, stable highest mortgage limits for FHA Mortgages and FHA Refinance Loans that will become effective on Janurary 1st, 2009. These new highest mortgage limits have been set as part of The Housing and Economic Recovery Act of 2008 and will be stable limits.
Spencer Llewellyn is an FHA lending authority . If you would like more information on FHA Loans or FHA refinance loans
