California Home Loans
California is a unique state than any other states in the United States. California has one of the highest home prices in the nation. Home values in many areas of California is substantially higher than most parts of the country and both HUD as well as Fannie Mae and Freddie Mac and the Department of Veteran Affairs recognize that. Home loan limits for all loan programs are higher in the state of California than the rest of the United States. Most areas of California are classified as high cost areas where the lending loan limits is higher than the standard loan limits for FHA loans, Conventional loans, VA loans, and USDA loans.
FHA Loan Versus Conventional Loan
FHA lowered the FHA loan limit in early 2014 from $410,000 to $271,050 for FHA loan borrowers. However, FHA did make exceptions to the FHA loan limits to high cost areas throughout the United States. For example, the counties surrounding the Chicagoland area, Cook County, Lake County, DuPage County, McHenry County, and Will County are deemed high cost areas and the FHA loan limit is $365,700 instead of $271,0500. However, the rest of the state is $271,0500. With conventional loans, the conventional loan limit was $417,000 and there was no change with the conventional loan limits in 2014 and is still $417,000 in 2015. The disadvantage of FHA loan versus Conventional loan is the FHA loan limit. Many home buyers who need higher priced homes and larger loan amounts will no longer qualify with a FHA loan unless the property is located in a high cost area. FHA lending guidelines are much more lenient than conventional lending guidelines as well. However, many California home buyers are in luck. In California, depending on the high cost county you are in, FHA loan limits are sometimes higher than conventional loan limits.
FHA Loan Versus Conventional Loan Limits In California
If you are a home buyer in California in a high cost area and are purchasing a higher end home, a FHA loan may be the mortgage loan of choice. There are many areas in California where the FHA loan limit is $625,050. Maximum conventional loan limits is capped at $417,000 but in California, the conventional loan limits are higher on areas classified as high cost areas. For example, if a home buyer were to purchase a home in San Diego, FHA loan limit is $562,350. Ironically, conventional lending loan limit in San Diego County is also $562,350 and so is the VA loan limit. For a two unit owner occupied property in San Diego County, the maximum lending loan limit for all three loan programs ( FHA, VA, and Conventional) is capped at $719,900. For a three unit owner occupied property in San Diego County, all three loan program caps the lending loan limit at $870,200. For a four unit property in San Diego County, the maximum lending limit for FHA, VA, and Conventional loan is capped at $1,081,450. San Francisco has higher FHA and Conventional lending loan limits at $625,500.
FHA Loan With No Lender Overlays In California
If you were told you do not qualify for a FHA Loan in California due to the mortgage lender overlays , look no further and contact us at 262-716-8151. We are a no overlay California FHA mortgage lender. Minimum credit scores required for a 3.5% down payment home loan in California is 580 FICO. Most California mortgage lenders will require a minimum credit score of 640 FICO even though the minimum credit score required is 580 FICO. California mortgage lenders can mandate a higher credit score requirement even though the federal minimum credit score guidelines set by FHA is 580 FICO. FHA maximum debt to income ratios is capped at 56.9%. However, many California mortgage lenders will have debt to income ratio overlays capped at 45% on FHA Loans. We are FHA mortgage lenders with no mortgage lender overlays and will go by the minimum federal FHA lending guidelines. Whatever the minimum FHA lending guidelines are and you get an automated underwriting system , we go off the automated finding per DU FINDINGS or LP FINDINGS.