If you're new here, you may want to subscribe to my Blog Update Announcement List. Thanks for visiting!
The Federal Housing Administration, otherwise know as the FHA has been around since 1934, but has changed tremendously during that time. The primary purpose of the FHA mortgage program remains the same though. The FHA provides an insurance program which is designed to encourage lenders to loan money to borrowers whose situation would be considered marginal, or possibly even subprime by conventional lending standards. However, since the FHA mortgage program is primarily intended to extend the benefits of home ownership to lower income groups the maximum loan amounts - commonly referred to as the FHA Loan Limits are lower at the present time than conventional mortgage limits and jumbo loans are not available.
FHA loan limits very by region and county and are set by calculating percentage of the conventional mortgage lending limits. The FHA Modernization Act which has not yet been passed at this time proposes to raise the FHA limits to at least match conventional lending limits. At the present time, the conventional lending limit is set for 2007 and 2008 at $417000, which translates to a maximum FHA limit which varies from $200,160 in “low cost” areas to $544,185 in Alaska, Guam and Hawaii.
To find the FHA loan limit in your area, go to : https://entp.hud.gov/idapp/html/hicostlook.cfm
