Alert: FHA Raises Loan Limits

3/6/08



Effective immediately, the United States Department of Housing and Urban Development will temporarily raise FHA loan limits to range from $271,050 to $729,750. It is expected that as many as 240,000 homeowners and homebuyers nationwide will benefit from this change. The change is temporary and is set to expire 12/31/08 unless the U.S. Congress approves bipartisan legislation to permanently increase the loan limits. For the complete press release click here http://portal.hud.gov/portal/page?_pageid=33,717234&_dad=portal&_scheme=portal




Who is FHA?

FHA is the Federal Housing Administration and is a part of the United States Department of Housing and Urban Development. FHA insures mortgages issued by FHA-approved lenders, thereby protecting the lenders against losses associated with borrower default. FHA provides incentive for lenders to make loans that might otherwise be deemed too risky.



What does this mean to the St. Louis, MO homeowner?

This will benefit a number of homeowners throughout the St. Louis area as well as the entire State of Missouri. St. Louis city and county along with most surrounding counties (St. Charles, Jefferson, Warren, Lincoln) will benefit from loan limits increased to $281,250 from $200,000. A majority of the other counties in Missouri will benefit from an increase to $271,050 from $200,000. So what does all this mean? This will open up the pool of homeowners that are able to qualify for FHA insured financing. With the fallout of subprime, many homeowners have been left with mortgages that they are unable to refinance because they don't currently qualify for the stricter guidelines associated with conventional financing. Many of these homeowners are in Adjustable Rate Mortgages (ARMs) and have already seen their payments increase significantly. This will also increase the number of people able to purchase homes in Missouri.


For a list of FHA loan limits for every county in the United States, click here https://entp.hud.gov/idapp/html/hicostlook.cfm. To filter your search results, go to the Limit Type drop down box and select FHA Forward.


For other helpful homebuying resources visit http://www.noblelenders.com/