FHA Mortgage Loan Limits reduced for Metropolitan Singe-Family Properties starting October 1, 2011

House - BSN

(Best Syndication News) - The Federal Housing Administration (FHA) single-family mortgage loans will have new lower limits starting on October 1, 2011. The lower loan limits were initially planned to take effect in January 2009, but because of the housing market problems, Congress delayed the change by enacting the Economic Stimulus Act of 2008 (ESA).

The single-family loan limit reduction was outlined in the Housing and Economic Recovery Act of 2008 (HERA). The loan limits will be reduced where real estate properties are at the highest in metropolitan areas nationwide. Limits in most other parts of the country would remain unchanged.

The FHA single-family mortgage loan limit for most areas will remain at $271,050. The higher-cost metropolitan regions will have a mortgage loan limit reduction from $729,750 to $625,500 for one-unit properties. The loan limits will range between $271,050 and $625,500 depending on the median home price in the metropolitan area. There also will be new loan limits for two, three, and four unit properties outlined by the FHA. Additionally, Alaska, Hawaii, Guam, and the Virgin Islands may have higher loan limits.

Altogether, the reduced loan limits will affect 669 counties nationwide. FHA insures mortgage loans in 3,234 jurisdictions.

The FHA-insured reverse mortgages will stay the same with a maximum claim of $625,000.

By: John Waters



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