Recently, the Department of Housing and Urban Development released the new limits on FHA-insured mortgages. Previously, potential homeowners in some areas complained that they could not take out an FHA loan because properties in their county exceeded the loan limits. The increased limits are a result of legislation included in the new stimulus bill and are good through the end of the year (December 31, 2009).

According to a letter from this governmental organization, the lower floor on FHA loans (borrowers in lower-cost areas are able to take out a mortgage for up to this amount) are as follows:

One-Unit $729,750
Two-Unit $934,200
Three-Unit $1,129,250
Four-Unit $1,403,400

The ceiling on FHA mortgages for higher-cost areas has been raised in areas such as Los Angeles County, New York county, Salt Lake county, and DC. These limits are as follows:

One-Unit $271,050
Two-Unit $347,000
Three-Unit $419,400
Four-Unit$521,250

This is good news for credit worthy borrowers who can’t qualify for traditional loans because they don’t have a 20% down payment. FHA-insured mortgages allow borrowers to make a down payment as low as 3.5% and issuers are often able to overlook credit report flaws.

To find the FHA loan limit in your area, take a look at the HUD FHA Mortgage Limit Website.

See Also:

FHA Mortgage Guide

Answers to Common FHA Loan Questions

Tags | FHA, FHA limits, HUD, low downpayment loans