Anna Child Group
As the real estate market has shown improvement over the last year, the Federal Government is beginning to withdraw “support” for the real estate industry. Contemplated reductions in the purchase of mortgage backed securities, and now a reduction in the FHA loan limit for high cost areas (like Orange County, California).
On Friday, HUD announced the new loan limits for 2014:
They are reducing the max loan amount down to $625,500… the previous loan limit was $729,750.
The maximum FHA national loan limit “ceiling” is at 150 percent of the national conforming loan limit. In areas where 115 percent of the median home price (of the highest cost county) exceeds 150 percent of the conforming loan limit, the FHA loan limits remain at 150 percent of the conforming loan limit.
FHA loan limits for high cost areas.
- One Unit $625,500
- Two Units $800,775
- Three Units $967,950
- Four Units $1,202,925
The loan limits are effective for case numbers assigned on or after January 1 2014 through December 31, 2014.
This announcement is further incentive for borrowers to make an offer on a home and obtain a case number assignment before the end of 2013.
Do not wait if you are a buyer thinking about originating an FHA loan between $625,600 and $725,750… your window of opportunity is closing.
And, sellers, if you have a home priced in the $645,000 to $750,000 range… I recommend you Do Not take it off the market during the holidays because your buyer pool will be shrinking after January 1st, 2014.