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New mortgage limits set for FHA mortgages and FHA refinance loans.

By: Robert Thomson

Today, HUD announced its new, permanent highest mortgage limits for FHA Mortgages and FHA Refinance Loans that will become effective on Janurary 1st, 2009. These new highest mortgage limits have been set as part of The Housing and Economic Recovery Act of 2008 and will be permanent limits.

Under the Housing and Economic Recovery Act of 2008 (HERA) , which passed in July 2008, the Federal Housing Finance Agency (FHFA) was established and directed to set conforming mortgage limits each year. The rules governing how the finance limits are established differ from the rules set forward in the Economic Stimulus Act of 2008 (ESA), which applies to loans originated in 2008. For example, under ESA, finance limits for high-cost areas were set at 125 percent of Local house value medians and the greatest high-cost limit was 175 percent of the national conforming limit ($729,750 in the continental U.S.).

Starting January 1st, the nationalmortgage limit for one-unit homes in the lower 48 states shall be pegged to a house value index selected by the FHFA. The national mortgage limit for 2009 will remain at $417,000. In upcoming years, the fha mortgage limit for any given area shall be set at 115 percent of the median house in that area, as determined by HUD, except that the FHA finance cutoff in any given area cannot exceed 150 percent of the Freddie Mac nationalfinance limit, nor be lower than 65 percent of the Freddie Mac nationalfinance limit.

This essentially creates the “Floor” and the “Ceiling” for the highest FHA mortgage total for a given region with the lowest maximum FHA finance amount being $271,050 in any zone and the maximum FHA finance amount being 625,500. Alaska, Hawaii, Guam and the USVI may be adjusted to 150% of these limits to account for higher costs.

The new FHA mortgage limits for 2009 are detailed below:

In areas where 115 percent of the median house charge is less than 65 percent of the Freddie Mac limit, the FHA limits are set at the 65 percent total, i.e., the “Floor,” as follows:

One-Unit $271,050
Two-Unit $347,000
Three-Unit $419,400
Four-Unit $521,250

Any zone where the limits exceed the floor is known as a high costarea. In areas where 115 percent of the median house value exceeds the 150 percent figure, the finance limits are set at the 150 percent total, i.e., the “Ceiling,” as follows:

One-Unit $625,500
Two-Unit $800,775
Three-Unit $967,950
Four-Unit $1,202,925

For all other areas, i.e., those where 115 percent of the median home for the area is in between the bottom and the ceiling, the limit shall be at 115 percent of the median home value.

These new FHA mortgage limits could mean that the time might be right for you to consider an FHA refinance mortgage or an FHA mortgage for your new home purchase. If you would like more information on FHA home loans or FHA refinance loans, www.fha-101.com.

Article Source: http://articleaddict.com

Spencer Llewellyn is an FHA lending expert . If you would like more information on FHA Loans or FHA refinance loans, please visit www.fha-101.com. . Visit New mortgage limits set for FHA mortgages and FHA refinance loans..

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