The news today from FHA is that loan limits were raised, potentially making financing a tad easier for some folks.
FHA is the Federal Housing Administration, a governmental body that basically insures loans. FHA loans, in the past, had some stigma attached to them, because of the low amount of down payment needed. They were considered loans for first time buyers, or other folks who couldn’t get a down payment together.
This has changed over the years. FHA financing has come a long way, baby.
Before today, in Pima County, you could only get an FHA loan for up to roughly $239,000. This is well below the average sales price in Tucson for a single family home! Today, new temporary loan limits were announced: for Pima county, for a single unit, FHA limits are at $316,250. This is good. FHA buyers can now use that financing to afford the typical Tucson home.
Sweet thing about FHA is that they only require 3% down, whereas conventional loans currently require 10% in Pima county.
From Mary Maza-Abihai of Long Mortgage on today’s new FHA limits:
For the first time since November 2004, the FHA floor limits will temporarily increase on Friday, March 7, for one-and two-unit properties. Floor limits are the maximum loan amount allowed in a specific county area. Floor limits are also known as the base loan amount.
Pima County has increased the maximum base loan amount to $316,250.
This should have a huge buyer impact. FHA minimum required down payment is 3% of Sales Price. The 3% can be a gift.
With changes daily to our market and lending guidelines, Conventional loan financing in Pima County requires a 10% down payment. 5% must be the borrowers own funds.
FHA has typically been know as a first time home buyers product. This change should allow for more home buyers, first time or not, to purchase in this current market.
Questions? Go to the money source. You can call Mary at (520) 918-1634 or email her: marym@longmortgage.com.
March 10th, 2008 at 9:23 pm
I’m an investor in Tucson, that does FHA have limitations for non-owner occupied single families?
March 11th, 2008 at 11:33 am
Hi Brian - my lender says FHA loans are for owner-occupants only.
March 12th, 2008 at 8:25 am
The limit raise in your area sounds like it will allow many to be able to afford a median price home in your area and for many this is great news. I see this as a positive way to move the inventory of foreclosed homes. Realtors get ready those relatively free weekends just got busier.
March 13th, 2008 at 7:59 am
I think this weekend will bring many out with this recent change and looking to see if they can buy a house. Many will start with a lender and then move onto searching communities and internet sites and by the end of the month I think they will be in realtors offices wanting to tour properties.
March 14th, 2008 at 8:43 am
I thought FHA was owner occupied as well! I see this type of loan being the work horse that will buy most of these foreclosed houses.
March 17th, 2008 at 7:23 am
Many have been waiting for this to happen and now can start process and meet with a lender to see if they qualify. I think alot of people are looking for FHA loans.
March 18th, 2008 at 7:14 am
In our area the FHA loan is a popular one as well and we expect the business to pick up this next week due to recent updates on new limits. We have alot of foreclosures and would make great homes or rental properties.