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Financial
Dec 15, 2017

FHA Keeps Pace with Appreciation of Housing Market

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

In response to the robust housing market, the Federal Housing Administration (FHA) announced recently that maximum loan amounts will increase in most parts of the country. 

This is partially due to the fact that FHA requirements for making changes to loan limits are tied to the Federal Housing Finance Agency, which recently increased its limits for conforming loans to $453,100, as I wrote about here.

As a result of the announcement, some of the more expensive areas in the country will see the limit for FHA-insured loans rise from the 2017 level of $636,150 to $679,650. The national limits for lower cost areas are set at 65 percent of the maximum for conforming loans, a development that caused the maximum for these areas to increase from $275,665 to $294,515. 

This is definitely a positive sign for the stability of the housing market and its strength moving forward. The numbers only reinforce this idea, as 3,011 counties nationwide will see an increase in maximum FHA loan limits, for case numbers assigned on or after the beginning of the New Year. Only 223 counties will see the FHA loan limits stay at the current levels, and no areas will see a decline in the maximum loan limits for forward mortgages.  

It is worth pointing out that borrowers with an interest in securing an FHA loan do not have to wait until the onset of 2018 to capitalize on the new rules. As an example, an FHA loan for $294,515 could be opened right now; the key point is that the case number just has to be assigned on or after Jan. 1, 2018. 

The same is true for conforming loans. Those who are interested in taking advantage of the new rules for conforming loan limit maximums do not have to wait to start shopping until they have had their black-eyed peas, greens and cornbread. This is because it is possible to go ahead and open a loan for a conforming loan up to $453,100, so long as the case number is not assigned until the advent of the New Year.

How does this apply to local buyers in Brunswick, New Hanover and Pender counties? Instead of only being able to secure an FHA loan for $275,665, it will now be possible to obtain a maximum loan amount of $294,515. An uptick in purchasing power right before the holiday shopping season is definitely something to get excited about!  Thank you, Santa. 

How does this impact other parts of North Carolina? The maximum FHA loan amount for Raleigh will be $318,550 moving forward; for the Durham-Chapel Hill area, it will be $379,500. In Kill Devil Hills, buyers shopping for an FHA loan could secure one for up to $391,000. Interestingly enough, Hawaii, Alaska and Guam have been deemed areas of special exception. Buyers wanting an FHA loan in those areas could potentially secure one for up to $1,019,475.


What to Know about FHA Loans

FHA loans were created to provide lower income buyers with a viable option for financing a home, so they are typically easier to qualify for compared to other options. The minimum down payments for FHA loans are lower, and the credit scores that are required to qualify are lower. It can even be possible for a buyer with a credit score at 500 to secure this type of loan. The downside is that, in most cases, the buyer will be required to pay mortgage insurance as a component of their monthly premium, and that’s never a good thing. 

For a confidential discussion about your options, give me a call at the number below. 

Patrick Stoy (NMLS Numbers 39527 and 39166) has 18 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.

 

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