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Maximum FHA Loan Limits Restored To $729,750

After a brief return to lower, pre-2009 levels, FHA loan limits have been restored. As signed into law last Friday, maximum FHA loan limits are — once again — as high as $729,750.

The move creates additional mortgage financing possibilities in more than 650 U.S. counties, and promises to increase the FHA’s mortgage market share, which has grown from 6% in 2007 to roughly 30% today.

The change in FHA loan limits also marks the first time that FHA loan limits exceed those of conventional mortgage-backers Fannie Mae and Freddie Mac.

Conventional loans remain capped at a maximum of $625,500.

For home buyers in Longmont and nationwide, FHA-insured mortgage offer several advantages over comparable conventional loans, the most commonly cited of which is that FHA-insured loans require a down payment of just 3.5 percent.

FHA-insured mortgages carry other advantages, too, however.

First, FHA home loans are not subject to loan-level pricing adjustments (LLPA). This means that, all things equal, buyers and would-be refinancers with credit scores below 740; or, who live in multi-unit homes; or, who have high loan-to-values are not subject to additional loan fees as a conventional mortgage applicant might.

Second, after 6 months of on-time payments, FHA-backed homeowners are eligible for the FHA Streamline Refinance. The FHA Streamline Refinance is among the simplest loan products for which to qualify with no appraisal required. Even if you’re “underwater” on your mortgage, you can still be streamline-eligible.

And, lastly, at least in today’s market, FHA mortgage rates are below those of the conventional market.

The downside of FHA financing, however, is that all FHA mortgages require mortgage insurance and FHA mortgage rates are often higher versus a comparable conventional loan. This means that, although its mortgage rate may be lower, the payment for an FHA home loan may be higher as compared to a Fannie Mae mortgage with similar credit traits.

FHA loans aren’t always optimal, but with higher FHA loan limits, expect the FHA’s market share to increase.

Check your local FHA loan limit at the HUD website.

Tags: Tags: FHA, High-Cost Areas, Loan Limits

10 Ways To Better Sex In Boulder Colorado!

Yes I know…what a deceptive way to attract readers to my Boulder real estate blog but how else do you dress up the process of obtaining an FHA/VA loan in a smooth manner?  In Part I of my blog, Uncle Sam Passes Housing Stimulus Bill , I summarized what the new FHA reform laws mean for all of us when purchasing Boulder real estate using a government loan. 

In Part II, I am recommending 10 steps you can take to help ensure your FHA/VA mortgage experience is VERY satisfying.  Now it may not be as satisfying as sex for most you Read the rest of this entry »

Tags: Tags: Boulder property, Boulder real estate, FHA, home, lender, mortgage loan, reform laws, sex, Uncle Sam, VA

Uncle Sam Passes Housing Stimulu$ Bill

The Housing and Economic Recovery Act of 2008 was made official on July 30, 2008.  This housing stimulus bill passed the House and Senate by overwhelming numbers and President Bush was quick to follow suit.  Hopefully these changes will help jump start the slumping housing market but some feel it is too little too late.  Regardless, there are still many home buyers who need affordable homes and FHA financing is one of the most popular means to obtain a mortgage loan.

If you are wondering what an FHA loan is it is a loan insured by the Federal Housing Administration (FHA) and made by an approved lender in accordance with the FHA’s regulations.  FHA requires that the property being purchased meets certain minimum standards.  This mortgage may be easier to qualify for than a conventional mortgage, but it also has a lower maximum loan limit that varies depending on the average cost of housing in a given region.  FHA loans require the borrower to pay mortgage insurance premiums (MIP) if the down payment is less than 20%.  Fixed and adjustable rates are available with FHA loans.

If you are considering an FHA loan, please remember FHA loans do take longer to process than conventional loans and the current average days to close is 35+ days.  Also, FHA inspectors are more finicky when it comes appraisal time and there may be two inspections required for the property.  This may be an important factor if you plan to buy a bank owned property which may have one or more inspection issues which could define if the property is considered habitable.

What does this mean for you if you plan to obtain FHA financing?  Read the rest of this entry »

Tags: Tags: Boulder real estate, down payment, FHA, FHA financing, FHA reform, housing market, mortgage loan, President Bush, real estate