FHA Loan Limits Raised

Nearly a quarter of a million more families could be eligible this year to purchase or refinance their homes using FHA-insured mortgages, due to a temporary lifting of loan limits. The Economic Stimulus Act of 2008 will allow HUD’s Federal Housing Administration (FHA) to temporarily increase its loan limits and insure larger mortgages at a more affordable price in high cost areas of the country.

Beginning today, HUD will offer temporary FHA loan limits that will range from $271,050 to $729,750.The maximum amount of $729,750 will only be applicable to extremely high-cost metropolitan areas such as: New York, Los Angeles, San Francisco and Washington, D.C.

Will an FHA loan help you?

FHA loans aren’t government loans. Private lenders make these loans, but they are insured by the federal government. They feature low down payment requirements, but they will not work for you if you cannot document an adequate stable income or if you owe more than your home is worth.