Written By: Leslie Petersen
Everybody keeps asking if FHA loan limits were increased with the Economic Stimulus Act, and if so, by how much? The final version of the Stimulus Act was signed by the President on February 13th, and YES, FHA maximum loan limits are increased! There's a lot of confusion and misinformation out there, probably because there's a lot that we don't know yet.
But there is plenty that we DO know, and I think it's great news! I'm only going over the single-family provision of the Act, of which we DO know:
- FHA maximum loan limits are increased.
- The increase is for FHA loans that are approved on or before 12-31-2008.
- $271,050 is the new FHA floor, based on 65% of Freddie Mac current limits. The previous floor was $200,160 based on 48% of Freddie Mac limits.
- The new limits will be the lesser of:
- 125% of the Area Median Price; or
- $729,750 which is 175% of 2008 Freddie Mac limits.
- HUD has 30 days after enactment to define the Area Median Prices in the Country and publish the new loan limits.
This means that ALL FHA limits will be increased by something! The areas with low median prices will go to $271,050. The areas with high Area Median Prices can go as high as $729,750. But until we know what HUD will use for Area Median Prices, we won't know what any of the exact amounts are.
Read More
