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The new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.
To find out the new limits in your area, simply click on this link:
https://entp.hud.gov/idapp/html/hicostlook.cfm
It will take you to the "mortgage limits" page at the HUD web site. On that page, enter your state and county information, chose the type of loan from the "Limit Type" drop-down box (FHA Forward, Fannie/Freddie or HECM). [Note: FHA Forward is what HUD is calling the temporary FHA loan limit.] Then click the "send" button at the bottom of the page. On the results page, you'll see the new loan limit for the type of loan you selected for your area.
The new loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750.
We expect the impact of these loan limit increases on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages.
As NAR research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation's mortgage market.
An economic impact study conducted by NAR in January 2008 estimated that increasing the GSE conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.
HUD was mandated in the Economic Stimulus Act to publish new loan limits within 30 days of the bill's signing by President Bush on February 13. NAR strongly supported this economic stimulus package because of the relief we felt it would bring our members.
Regards,
Dick Gaylord
2008 NAR President
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Can I really buy a house? -
For millions of people every year, the answer is "yes", and an FHA mortgage might be the way you can. Every year FHA helps thousands of first-time homebuyers just like you move into the house of their dreams. A home is an investment, it can save you money and it's a place to live and raise children. It's a plan for the future and an investment in your community. That's why we at FHA want all Americans to have an opportunity to enjoy the benefits of owning a home.
Knowledge opens doors. This is literally true when it comes to buying a home. To become a first-time homebuyer, you need to know where and how to begin the home buying process. The following questions and answers will give you basic knowledge. and the tools necessary to navigate the entire process - from deciding whether you're ready to buy, all the way to that final proud step, getting the keys to your new home!
Are you ready to buy a home? -
You can find out by asking yourself some questions:
- Do I have a steady source of verifiable income? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
- Do I have a good record of paying my bills?
- Do I have few outstanding long-term debts, like car payments?
- Do I have money for a down payment?
- Do I have the ability to pay a mortgage every month, plus additional costs?
If you can answer "yes" to these questions, you are probably ready to buy your own home.
Isn't buying a home really hard? Don't you need a lot of money down and perfect credit? -
It's not nearly as hard as you might think. Our 100 Questions and Answers covers most of the situations that you might think of. FHA understands that many first-time homebuyers may have had some financial problems in the past and don't have a lot of money saved. That doesn't mean you can't buy a home. Because FHA insures your mortgage, lenders are more willing to give loans with lower qualifying requirements, making it easier for you to qualify (or get approval). Even if you have had credit problems such as bankruptcy, it is easier for you to qualify for an FHA loan than a conventional loan. FHA has a low 3% down payment requirement, and that money can come from a family member, employer or charitable organization. Many other conventional loans don't allow this.
How can I find out what my credit rating is? -
There are several ways to do this. You can purchase a credit report from one of the three national credit reporting agencies: Equifax, Experian and TransUnion. They also offer extra services for a price, where you can get regular reports on your credit.
Better yet, you may be entitled to a free credit report every twelve months from each of these three agencies. To request your credit reports, visit www.annualcreditreport.com. At this site, you can learn how to get your free credit reports. You might also want to visit the Federal Trade Commission's web site for consumers at www.ftc.gov/bcp/consumer.shtm for information about free credit reports and for some good advice about your credit.
Purchase/rehabilitation loans -
Sometimes you might see a home you'd like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get just one mortgage loan which includes the mortgage and the cost of repairs combined. The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. The advantage of this loan is that you can buy a home that needs a lot of work, but you still have only one mortgage payment, and you can complete the repairs after buying the home. "Read more about these loans."
I'm ready to get started. What do I do next? -
FHA will take you through the entire home buying process. Click on the sites below for a lot of information on buying a home with an FHA mortgage. You can even get pre-qualified for a mortgage.
Overview of the buying process
See how much house you can buy, and whether you qualify for an FHA mortgage
Click here for more information on the Federal Housing Administration.
And remember . . . Don't spend a PENNY 'til you call JENNY!
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About the Federal Housing Administration
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History
Leadership
What is the Federal Housing Administration?
The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family, multifamily, manufactured homes and hospitals. It is the largest insurer of mortgages in the world; insuring over 34 million properties since its inception in 1934.
What is FHA Mortgage Insurance?
FHA mortgage insurance protects lenders against loss if the homeowner defaults on their mortgage loan. The lenders bear less risk because FHA will pay the lender if a homeowner defaults on their loan. Loans must meet certain requirements established by FHA to qualify for insurance.
Why does FHA Mortgage Insurance exist?
Unlike conventional loans, FHA-insured loans require small down payments. There is more flexibility in an FHA loan than conventional loans in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property-whichever is longer.
How is FHA funded?
FHA operates entirely from self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.
History of the Federal Housing Administration -
Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965.
When the FHA was created, the housing industry was flat on its back:
- Two million construction workers had lost their jobs.
- Terms were difficult to meet for homebuyers seeking mortgages.
- Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over three to five years and ending with a balloon payment.
- America was primarily a nation of renters. Only four in 10 households owned homes.
During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war.
In the 1950s, 1960s and 1970s, the FHA helped to spark the production of millions of units of privately-owned apartments for elderly, handicapped and lower income Americans. When soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA's emergency financing kept cash-strapped properties afloat.
The FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.
By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent.
The FHA has insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. FHA has helped greatly with that success.
Email Jenny for guidance through all aspects of the home ownership process.
And remember . . . Don't spend a PENNY 'til you call JENNY!
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How HUD Can Help Me Become a Homeowner
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HUD helps people by administering a variety of programs that develop and support affordable housing. Specifically, HUD plays a large role in homeownership by making loans available for lower- and moderate-income families through its FHA mortgage insurance program and its HUD Homes program.
HUD owns homes in many communities throughout the U.S. and offers them for sale at attractive prices and economical terms. HUD also seeks to protect consumers through education, Fair Housing Laws, and housing rehabilitation initiatives. Contact HUD in the phone book "blue pages" for a listing of the HUD office near you or visit the website.
Visit this link for Nine Steps to Buying a Home.
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Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA loans require mortgage insurance primarily for borrowers making a down payment of less than 20 percent.
Mortgage insurance is charged to the homeowner each month at the rate of .5 percent per year of the total loan amount. FHA also charges an upfront mortgage insurance premium of 1.5 percent.
FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:
- For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
- For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
- Mortgages with terms 15 years and less and with Loan to Value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.
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Find answers to any question at this comprehensive one-stop Federal website. It is the official gateway to federal, state and local government websites and documents.
www.FirstGov.gov
Official information and services from the U.S. government
Thank you for visiting www.HendersonvilleTennesseeRealEstate.com.
And remember . . . Don’t spend a PENNY ‘til you call JENNY!
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