The U.S. Department of Housing and Urban Development (HUD) announced the new Federal Housing Administration (FHA) mortgage loan limits for single-family homes set to begin January 1, 2009. The change was required under the guidelines set forth in the Housing and Economic Recovery Act of 2008.The Act sets the national conforming mortgage loan limit to a house price index chosen by the new Federal Housing Finance Agency (FHFA). For 2009, the national conforming mortgage loan limit will remain at the current level of $417,000. It also requires that FHA mortgage loan limits to be set at 115% of the median house price in a given area with a floor of 65% and a ceiling of 150% of the national conforming mortgage loan limit.

Under these guidelines, single-family homes will be allowed to qualify for FHA mortgages up to a maximum of $271,050 in low cost areas and up to a maximum of $625,500 in high cost areas. The February 2008 Stimulus Package had temporarily raised the FHA maximum to $729,750 through December 31, 2008. While the new maxmium amount is being lowered, it is still much higher than the old $362,790 limit that was in place prior to the change from the Stimulus Package.

And, since the FHA Insurance Fund is supported by the premiums charged to borrowers who receive an FHA mortgage loan, the higher loan limits do not actually cost the government money. Something that is almost a novelty in today’s current financial enviornment. The Fund also helps make more home mortgage loans available for low to moderate income and first time home buyers because it’s backed by the full force of the U.S. government, thereby freeing lenders from assuming the risk of borrower defaults.

Examples of changes in our local counties here in Southwest Florida for 2009 include the following:

Lee County (including Ft. Myers and Cape Coral) - Median Price $235,695, New FHA Loan Limit $271,050, New Fannie/Freddie Limit $417,000.

Collier County (including Naples) - Median Price $390,000, New FHA Loan Limit $448,500, New Fannie/Freddie Limit $448,500.

To find your individual counties 2009 loan limits, you can use HUD’s county search feature at https://entp.hud.gov/idapp/html/hicostlook.cfm. Just choose your state, enter your county name and select the appropriate loan limit type and the limit year CY2009. HUD also has a comprehensive listing of the new loan limits in all counties throughout the country available for downloading. For more information, visit HUD’s site at: http://www.hud.gov/pub/chums/file_layouts.html.

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Metro Mortgage Company is a federally regulated Mortgage Banker specializing in residential Florida home loans including Conventional, Jumbo and FHA/VA mortgages. Call us today at 888-617-3674.

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Tags: FHA, HUD, mortgages