Loan Limits Go Up
|January 7, 2002|
Federal Housing Administration Bumps Up Maximum Mortgage Guarantee Amounts
Inman News Features
The U.S. Department of Housing and Urban Development announced the Federal Housing Administration increased its single-family home mortgage limit by 9 percent, effective Jan. 1.
The FHA now can insure single-family home mortgages up to $144,336 in areas with low housing costs and up to $261,609 in areas with high housing costs.
Loan limits also were raised for two-, three- and four-unit residential buildings.
The FHA is sending letters to thousands of mortgage lenders and brokers to make them aware of the higher maximums.
"Housing has remained one of the stalwarts of our economy. These new loan limits will further contribute to an even stronger housing market in 2002 and expand homeownership opportunities for many more families," said HUD Secretary Mel Martinez.
FHA-insured loans require a down payment of only 3 percent of the home purchase price and permit family and friends to contribute to initial home-buying expenses. FHA guidelines have easier credit standards and permit borrowers to carry more debt than private mortgage insurers typically allow.
The new loan limits are part of an annual adjustment HUD makes to account for rising home prices. Loan limits are tied under federal law to the conforming loan limits of Freddie Mac and Fannie Mae, federally chartered corporations that buy and package mortgages.
The higher loan limits also are available to senior citizens who qualify for FHA-insured reverse mortgages. Reverse mortgages allow homeowners age 62 and older to borrow against the value of their home in the form of a lump-sum payment, monthly payments or a line of credit. The reverse mortgage isn?t repaid until the senior moves out of the home or dies.
Copyright: Inman News Service