FHA mortgage limits increase to $365,000 in the Twin Cities Metro
HUD announced the new FHA mortgage limits created by the Fed's economic stimulus plan and the winner is...the Minneapolis–St. Paul metro area!
Why is this good news? FHA programs are now the best option for many buyers who fall short of meeting the downpayment and/or qualifying ratios required by conventional financing.
With the amount that can be borrowed using an FHA mortgage increasing from $271,050 to $365,000, an additional 25 percent of the homes currently on the market are candidates for FHA financing. This means more than 77 percent of homes currently for sale could be purchased using FHA. This important financing option brings additional buyers into the market who could not otherwise afford to purchase these homes.
More good news: A recent court ruling allows for home buyers to continue to use certain downpayment assistance programs when purchasing a home using an FHA mortgage.
Years ago, a large percentage of metro area home sales involved FHA financing. With the advent of alternate subprime conventional programs, FHA lost much of its market share. Unfortunately, we all know too well the problems created by some of the alternate subprime conventional programs.
FHA is not the irresponsible, overly exuberant mortgage program that some of the subprime programs proved to be. FHA has a long-proven track record of putting qualified buyers who were not eligible for traditional conventional mortgage programs into homes.
If you are not familiar with FHA financing, now is the time to learn. Talk with your broker and contact your mortgage specialist to learn what new options are available for your buyers. More information can also be obtained at www.fha.gov.
We encourage you to share your thoughts about the FHA loan limit increase and how you believe it could change your business. Please utilize the Comments link directly below this story to give us your feedback.
This was a brilliant decision by the problem solvers. More buyers to gobble up that excess inventory and everybody wins.
Posted by: Tom Goodnature | March 08, 2008 at 08:45 AM
We are once again excited to use FHA financing in our transactions. Agents should "re-visit" FHA and understand that it is not the same program that many moved away from when HUD turned appraisers into inspectors. FHA will once again hold a significant place in our industry by encouraging and benefiting first time homebuyers.
Posted by: Chuck Heubach | March 10, 2008 at 08:22 PM