| On Monday HUD announced its new, permanent | | | | in any area and the highest FHA loan amount being |
| maximum loan limits for FHA Mortgages and FHA | | | | 625,500. Alaska, Hawaii, Guam and the USVI may be |
| Refinance Loans that will become effective on | | | | adjusted to 150% of these limits to account for higher |
| Janurary 1st, 2009. These new maximum loan limits | | | | costs. |
| have been set as part of The Housing and Economic | | | | The new FHA Mortgage limits for 2009 are detailed |
| Recovery Act of 2008 and will be permanent limits. | | | | below: |
| Under the Housing and Economic Recovery Act of | | | | In areas where 115 percent of the median house price |
| 2008 (HERA), which passed in July 2008, the Federal | | | | is less than 65 percent of the Freddie Mac limit, the |
| Housing Finance Agency (FHFA) was established and | | | | FHA limits are set at the 65 percent amount, i.e., the |
| directed to set conforming loan limits each year. The | | | | "Floor," as follows: |
| rules governing how the loan limits are established | | | | One-Unit $271,050 |
| differ from the rules set forth in the Economic Stimulus | | | | Two-Unit $347,000 |
| Act of 2008 (ESA), which applies to loans originated in | | | | Three-Unit $419,400 |
| 2008. For example, under ESA, loan limits for high-cost | | | | Four-Unit $521,250 |
| areas were set at 125 percent of local house price | | | | Any area where the limits exceed the floor is known |
| medians and the maximum high-cost limit was 175 | | | | as a high cost area. In areas where 115 percent of the |
| percent of the national conforming limit ($729,750 in the | | | | median house price exceeds the 150 percent figure, |
| continental U.S.). | | | | the mortgage limits are set at the 150 percent amount, |
| Starting January 1st, the national loan limit for one-unit | | | | i.e., the "Ceiling," as follows: |
| homes in the lower 48 states shall be pegged to a | | | | One-Unit $625,500 |
| house price index chosen by the FHFA. The national | | | | Two-Unit $800,775 |
| loan limit for 2009 will remain at $417,000. In future | | | | Three-Unit $967,950 |
| years, the mortgage limit for any given area shall be | | | | Four-Unit $1,202,925 |
| set at 115 percent of the median house price in that | | | | For all other areas, i.e., those where 115 percent of the |
| area, as determined by HUD, except that the FHA | | | | median home price for the area is in between the floor |
| mortgage limit in any given area cannot exceed 150 | | | | and the ceiling, the limit shall be at 115 percent of the |
| percent of the Freddie Mac national loan limit, nor be | | | | median home price. |
| lower than 65 percent of the Freddie Mac national loan | | | | These new FHA mortgage limits could mean that the |
| limit. | | | | time might be right for you to consider an FHA |
| This essentially creates the "Floor" and the "Ceiling" for | | | | refinance loan or an FHA mortgage for your new |
| the maximum FHA loan amount for a given area with | | | | home purchase. |
| the lowest maximum FHA loan amount being $271,050 | | | | |