FHA Expanded Loan Limits - Good News for the California Jumbo Market
In another article, we discussed the new, temporary class of loans established by the Economic Stimulus Act. Known as "Jumbo Conforming," this new class of loans can be sold to Fannie Mae and Freddie Mac, offering buyers and sellers the benefit of access to lower interest financing.
Another bonus of the Economic Stimulus Act is the increase in FHA loan limits. With this increase, the loan limit for single-family homes in high cost areas is as high as $729,000. A few areas in Hawaii are even higher.
FHA loans generally offer the following benefits:
- Lower down-payment requirements (as low as 3%)
- Lower credit score requirements (620 in some areas)
- Lower interest rates (because they are federally insured)
- More lenient underwriting guidelines,
- Higher debt-to-income ratios may be allowed,
- Possibility of refinancing to a lower rate,
- Cash-out refinances allowed in some situations.
Are there drawbacks to FHA financing? There aren't many, when you consider the benefits. FHA does require a 1.5 percent Mortgage Insurance Premium that is added to the loan amount. The FHA may require additional paperwork, although with the tightening credit market many non-FHA loans require as much paperwork. The FHA may also request two appraisals in markets defined as "declining areas."
FHA increased the loan limits for single-family homes in the following California counties to the maximum ($729,750). - Alameda
- Contra Costa
- Los Angeles
- Marin
- Monterey
- Napa
- Orange
- San Benito
- San Francisco
- San Mateo
- Santa Barbara
- Santa Clara
- Santa Cruz
- Ventura
Limits in other California counties were raised, although not to the maximum. To check the loan limit for your county, visit HUD's website.
Like the temporary jumbo conforming limits, the new FHA loan limits are only in effect for a limited time. If you are interested in buying or refinancing, you should take advantage of this benefit before it ends.
UMAX Mortgage offers mortgages in Ventura County, Los Angeles County, and throughout the state of California. Julie Cline is licensed by the CA Department of Real Estate #01743818.
If you have any questions about California jumbo loans, California jumbo conforming loans, or California FHA jumbo loans, feel free to contact Julie Cline at 866-599-8480 or on the web at http://www.umaxmortgagecalifornia.com.
Please note: this article is not intended as tax, financial or legal advice. Please obtain advice about your specific situation before making financial or legal decisions. 
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