FHA loan home requirements

fha_2013_ctyLoan limits for mortgages backed by the Federal Housing Administration (FHA) were scheduled to fall in 2014 due to the expiration of increased limits set during the housing crisis. However, the magnitude of change for the has caught many by surprise.

Stimulus legislation established higher limits to ensure homebuyer access to credit during the Great Recession. In general, FHA loan limits are set according to local home prices, subject to certain caps and floors. This legislation raised the cap from the prior level of $625, 500 to $729, 750. The factor translating local home prices to an applicable limit was also increased from 115% to 125% in high cost areas. A floor of $271, 050 is also in place.

As required by the 2008 Housing and Economic Recovery Act of 2008 (HERA), after January 1, 2014 the cap is scheduled to fall back to $625, 500 and the 115% factor returns. However, another change concerns the use of the methodology for applying area median home prices. This change results in applying lower prices to determine 2014 loan limits for some counties. The result is an additional reduction in FHA loan limits in many areas including places that experienced steep price declines during the recession. More than 300 counties are set to experience a drop in limits due to this home price methodology change.

The map below (click for a larger view) summarizes the combined effect of these changes.

NAHB’s analysis indicates that 408 counties will experience a loan limit decrease in excess of 10% as result of both the required cap and factor change and the price data impact. 102 counties will see a drop of more than 30%. The affected areas contain relatively dense concentrations of homes and population. For example, counties seeing a decline in FHA loan limits contain approximately 58% of owner-occupied homes in the nation.

NAHB joined with a number of other housing industry groups, including NAR and MBA, to express concern regarding the new limits.


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Atlantic Publishing Group Inc. The First-Time Homeowner's Handbook: A Complete Guide and Workbook for the First-Time Home Buyer (Book & CD-ROM)
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A.A. for Homebuyers. Zero Down FHA loans tied to

2004-01-26 14:30:51 by Your_pensions-funded-by-

Don't read this if you're invested in the mortgage market: you'll throw up:
Last week, the Bush administration proposed that the FHA allow zero-money-down financing for first-time homebuyers. Zero money down for a house. The new provision would give additional teeth to an already absurd mandate of the FHA: approving applicants who have demonstrated they pose too high a credit risk to get a loan through the conventional mortgage market.
- Lenders, of course, love the idea. "Any down payment," Angelo Mozilo, CEO of Countrywide Financial Corp. told the LA Times, "even 3% [the current requirement of the FHA] is a major, unnecessary obstacle for lower-income borrowers


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Questions about FHA loans

2002-07-05 13:04:12 by markster

I've read about these loans at If you have a FHA loan or even considered one please reply.
Is it really true you only have to put down 3%?
Is the following true? Your total move in cost is the FHA premium (2.25% of the mortgage), closing cost (3% of the home value) and down payment (3% of home value).
Also, I've heard that instead of PMI you pay a monthly FHA premium, if so, how much is it?
I've heard that FHA rates are considerbly lower than conventional rates. How much lower are they?
Thanks in advance for your time.
Markster


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  • Avatar Gene How much I will approve for FHA Home Loan?
    Sep 15, 2010 by Gene | Posted in Personal Finance

    I ve a good credit score 700 and I m planning to get FHA home loan and my monthy income before tax is $2600. How much I will qualify for FHA loan? Any tips will helpful to move forward thanks all.

    • Depending on the state you will have to buy a home that meets the requirements for an FHA loan. You can discuss this with your Realtor. You will have to submit, on several occasions, proof of employment, tax records and some additional information.