2014 Will Bring Changes To FHA Loan Limits
2014 is just less than two weeks away and there will be new mortgage regulations with HUD. Fannie Mae and FHA will be imposing new rules and regulations. One of the most critical ones is that the Federal Housing Administration, FHA, will be lowering FHA loan limits starting 2014.
Maximimum FHA Loan Limits Reduced
The Federal Housing Administration recently declared new rules which lowers single family residential FHA mortgage loan for 650 counties across the United States which could impact home buyer’s borrowing power on FHA insured mortgage loans. This includes all counties througout the United States except for counties classified as high cost areas.
FHA Loan Limits Higher In Chicagoland Area
Effective January 1, 2014, the Federal Housing Administration will cap FHA loan limits for residential single family homes to $365,700 in Chicago and surrounding surburbs. The current maximum FHA loan limits is set at $410,000.
FHA Loan Limits For Multi Unit Residential Properties
FHA loan limits for two units, three units, and four units are also being lowered. For two units, FHA loan limits are $468,150, for three units, FHA loan limits are reduced to 565,900, and for four units, FHA loan limits are lowered to $703,250.
FHA also announced earlier this year that they will be increasing the annual mortgage insurance premiums again on FHA insured mortgage loans by an additional 010% of the FHA mortgage loan balance amount. FHA has consistently increased mortgage insurance premiums in the past few years. FHA also requires that FHA insured mortgage loan borrowers carry FHA mortgage insurance premium over the life of the FHA mortgage loan. Before, FHA allowed homeowners to be able to cancel FHA mortgage insurance premium as long as their loan to value was at 78% as long as they carried mortgage insurance premium for 5 years.
Federal Housing Administration
The Federal Housing Administration is controlled and administered by the United Department of Housing and Urban Development, also known as HUD. FHA does not originate loan directly to the public. FHA .provides mortgage lenders mortgage insurance on mortgage loans that meets the Federal Housing Administration guidelines and criteria. FHA makes homeownership possible to first time home buyers and folks with less than perfect credit by allowing them to only put 3.5% down payment and being understanding to mortgage borrowers who have had prior bad credit and credit issues such as foreclosures, bankruptcies, deed in lieu of foreclosure, and short sale.
Role Of The Federal Housing Administration:FHA
The Federal Housing Administration provides mortgage insurance to mortgage lenders who meet the agency’s lending rules, regulations, and guidelines. FHA insured just under 40,000 residential homes back in 2007 and in 2010, the Federal Housing Administration insured almost 200,000 mortgage loans. The first three quarters of 2013, the Federal Housing Administration has insured just under 100,000 residential mortgage loans.
The Federal Housing Administration has recently released that they were short of funds and needed to request an advance of $2.0 billion dollars from the United States Treasury in order to replenish the FHA insurance fund due to mortgage insurance payments that it needed to pay due to residential mortgage loan defaults.
Housing prices have dramatically increased throughout the country some cities seeing double digit increases from 2012.
2014 And FHA Loan Limits And 2014 New FHA Guidelines
Although FHA will bring new FHA guidelines for 2014, FHA insured mortgage loans are still a Godsend mortgage program that enables Americans the chance of homeownership. FHA allows and makes homeownership possible for folks who have had periods of bad credit. FHA allowes those who have filed bankruptcy and had prior foreclosures have an opportunity to become homeowners again. FHA allows Americans a second chance for homeownership and make homeownership possible for all hard working Americans with very little down payment. If you are interested in seeing whether you qualify for a FHA insured mortgage loan, please contact me at 262-716-8151 or visit me at www.gustancho.com .