HUD Lowers FHA Loan Limits And How Affects Home Buyers

This BLOG On HUD Lowers FHA Loan Limits And How Affects Home Buyers Was UPDATED On November 26th, 2017

2014 is just less than two weeks away and there will be new mortgage regulations with HUD. FHA Lowering Loan Limits will definitely affect home buyers throughout the United States where home prices have been appreciating double digits every year.

Maximum FHA Limits Reduced: HUD Lowers FHA Loan Limits

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 throughout the United States except for counties classified as high cost areas

 HUD Lowers FHA Loan Limits And How Affects Home Buyers In Chicago

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 suburbs.

  • 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
  • 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 home ownership 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

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.

FHA Loan Limits And New HUD 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 home ownership.

  • FHA allows and makes home ownership possible for folks who have had periods of bad credit
  • FHA allows those who have filed bankruptcy and had prior foreclosures have an opportunity to become homeowners again
  • FHA allows Americans a second chance for home ownership
  • Make home ownership possible for all hard working Americans with very little down payment

Qualifying For Home Loans With High Loan Limits

With HUD Lowering FHA Loan Limits, The Gustan Cho Team at USA Mortgage has created and launched NON-QM Loans and Bank Statement Loans where there are no loan limits.

  • Home Buyers who cannot qualify for FHA Loans due to the reductions in Loan Limits can qualify for NON-QM Loans.
  • Non-QM Loans are portfolio loan programs where 10% to 20% is required and mortgage rates are higher than traditional government and/or conventional loans
  • Bank Statement Mortgage Loans For Self Employed Borrowers requires no tax returns and there is no loan limit caps
  • Either 24 months of personal and/or business bank statements are averaged to derive to monthly income
  • If borrower uses business bank statements, then only 50% of the bank statement deposits can be used
  • If borrowers uses personal bank statements, then 100% of the deposits can be used

Contact us for more details

Qualifying For Mortgage With Direct Lender With No Overlays

FHA mortgage borrowers who need to qualify with a five star mortgage lender with no lender overlays, please contact The Gustan Cho Team at USA Mortgage. We are available 7 days a week, evenings, weekends, and holidays. Please contact us at  262-716-8151 or email us at gcho@usa-mortgage.com.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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