« AZ Home Inspector Licensing Board going away? | Main | Foreclosure Rates and Neighborhood Crime » Saturday, March 08, 2008Recent Changes to the FHA Loan ProgramIt seems like the FHA Loan program is being looked to by government leaders, consumers, lenders and anyone in between to save the housing market. As a result there has been a lot of changes to this program within the past few months. 1. FHA Loan Limits Increased: The loan limit has been raised across the entire country. For Maricopa and Pinal County (which includes all the major cities in the Phoenix Metro area) the new limits are as follows:
2. Down payment Assistance Programs: While this is not a direct FHA feature, one of the major reasons to use the FHA program is because it allows third-parties to contribute towards a buyer’s down payment. The FHA loan limit is 97% of the value of the property but it allows the remaining 3% to be gifted from such non-profits as AmeriDream, Nehemiah etc. Recently HUD (which oversees FHA) challenged the legality of such gifts and threatened to shut them down. The down-payment programs fought back and recently won in court. 3. FHA Secure: This was an initiate from the White House designed to help subprime borrowers refinance into a FHA loan program. It is targeted to those on adjustable rate mortgages facing abrupt increases to their monthly housing payment. The HUD website has addition information, but here are some high points on how you may qualify for FHASecure:
There are further changes coming to the FHA program. Congress is working on a FHA Modernization bill which will decrease the down payment requirement but add risk based insurance (higher insurance for lower credit scores). So, stay tuned, nothing stays the same in today’s mortgage market.
Posted by Shailesh Ghimire, AZ Mortgage Guru on March 8, 2008 | Permalink CommentsThe FHA loan limit increases will be a big benefit to many homeowners nationwide. Especially in high-cost areas such as California and the east coast, the increases will help more people refinance out of adjustable rate mortgages with payments that are too high. The limits are as high as $729,000 in some parts of the country, making FHA a possibility for millions who could previously not qualify because they were above the FHA limit. Posted by: RJ Baxter | Mar 10, 2008 5:23:55 AM You're right, Shailesh. The government seems to think changes to FHA will save the housing market. I hope they're right but I have my doubts that FHA will bring the market back. The limits definitely had to increase since median price has gone up so much, even with recent price drops. It'll be interesting to see in the long term, if the federal government's steps toward assuming more high risk loans will actually help reduce foreclosures, or just prolong the agony and shift the losses from the private sector to the taxpayers. Afterall, it's easy credit to high risk borrowers that started the mortgage mess. It's really just a matter of time before the housing market picks back up. Real estate is cyclic and due to the easy access to credit and overall mania of a few years ago, the pendulum swung way too far one way. Now it's swinging back to the part of the cycle we don't like quite as much. With low interest rates, high inventory and thus desparate sellers, the buyers and investors will bring the market back soon. Especially as the stock market drops significantly and reminds us of just how volatile other investments can be. An unstable and less attractive stock market may be just what it takes to remind buyers and investors that even with all the highs and lows, real estate is still a good long term investment. Posted by: Shannon Hubbard | Mar 15, 2008 9:58:43 AM Today's Most Popular Fha Loans Fha loans are the most popular consumer mortgage loans you can possibly have today. 1.Fha fees- fha fees are not so much different than any other conventional mortgage loans you had in the past. So again learn the fha guidelines and the fha requirements. Posted by: yanni raz | Aug 8, 2008 10:13:09 AM Since I was one of those asking you questions, I really appreciate you getting this information out, especially regarding how the new FHA loan limit will be calculate Posted by: home loan | Jan 19, 2009 11:46:52 PM Always good information on your blog. Keep them coming Posted by: Myrtle Beach Real Estate | May 19, 2009 11:14:13 AM The comments to this entry are closed.
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