Borrowers may be able to apply in March under the expanded loan limits for mortgages insured by the Federal Housing Administration.
The higher limit becomes effective for all borrowers who apply after the U.S. Department of Housing and Urban Development publishes the temporary maximum loan amounts, spokesman Lemar Wooley told MortgageDaily.com in an e-mail message. HUD expects to publish the new limits in early March.
"FHA Loan limits will be 125 % of the median sales price for the area," the spokesman stated.
In areas where the median home price is above $583,800, the maximum FHA loan limit will be $729,750, HUD indicated. In areas where the median price is below $216,840, the FHA limit will be $271,050.
"Think of it this way," Wooley explained, "all FHA loans will fall in between $271,050 and $729,750."
"FHA Loan Limits are based on the county in which the property is located, except that for properties located in metropolitan or micropolitan statistical areas, as determined by the Office of Management and Budget, the limit is set at that of the county with the highest limit within the metropolitan or micropolitan area," he added.
H.R. 5140, the legislation lifting the limit, calls for the increased maximums to expire on Dec. 31, 2008.
|FHA, Conforming Limits Boosted
President Bush has signed into law emergency legislation that will temporarily increase the conforming limit by 75 percent. In addition, the limit for loans insured by the Federal Housing Administration will also see a temporary boost.