It’s like this new Fha loan burst onto the scene this year. Now it has become the sweet heart loan of the housing crisis even though the original had been around decades. The Federal Housing Administration was originated in 1934 for families that otherwise would have been excluded from the housing market. FHA maximum loan limits vary throughout the country by county.
Previously these loans were used primarily in areas where housing prices were relatively low. But during the last housing crisis things changed. Fannie Mae and Freddie Mac needed to raise there loan limits from $417,000. As a result, Congress raised them to $726,450 within our area. Due to the passage of the economic stimulus package, Fannie Mae and Freddie Mac may temporarily purchase loans beyond the company's prevailing conventional loan limit of $417,000 in designated high-cost areas to $729,750.
The loan limits of $729,750 are available for most Bay Area Counties. These include: Alameda, Contra Costa, Santa Clara, and San Mateo counties. The new loan to value is at 96.5% for a new first loan. The remaining 3.5% down payment may either be savings, a gift, employer contribution. It is also possible that the seller may pay all your closing costs up to 6%. It may appear to be to good to be true, but it is. Just see how easy the loan qualifying has been made.
• Low fixed interest rate loan
• Small down payment or no down payment
• Low monthly payments
• 15, 30, & 40 year loan amortizations
• No credit score required
• Less than perfect credit-derogatories ok
• Past Bankruptcies, and Collections
• Debt ratios to 55%
• Seller credits for down and closing costs
• Family gift funds, employer contribution, Grants
Overall, the change in loan limits will help provide economic stability to American communities and give nearly 240,000 additional homeowners and homebuyers a safer, more affordable mortgage alternative. Nearly a quarter of a million families could be eligible this year to purchase or refinance their homes using affordable, FHA-insured mortgages. Thanks to the economic growth package, signed into law by President Bush last month, 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 within high cost areas of the country. Permanent changes to FHA the loan limits are being addressed in bills that will also lower minimum down-payment requirements.
What are your thoughts?