Areas that will be affected in California are Riverside, San Bernardino, San Diego, Orange, or Los Angeles county. Starting October 1, 2011, temporary conforming and FHA insurable loan limits will be lowered nationwide.
HUD has also announced new (lowered) FHA insurable loan limits across the nation. California has several counties that will be negatively affected and potentially impact home buyers who have not saved a large down payment.
"Temporary loan limits" were enacted as part of the government’s 2008 economic stimulus package. At the time, the financial sector was entering its crisis and private mortgage lending was practically done. Financing was scarce for both homeowners and home buyers for whom loan sizes exceeded Fannie Mae and Freddie Mac’s national $417,000 limit — even for those with excellent credit and income.
Riverside and San Bernardino will no longer be considered a high cost area by Fannie Mae or Freddie Mac…which will affect you if you are looking to buy a home in the $350,000 to mid $450,00 price range.
County New FHA loan Limit New Conforming Limits will be as follows:
Riverside County $355,350 for FHA and $417,000 for Conforming
San Bernardino County $355,350 for FHA and $417,000 for Conforming
San Diego County $546,250 for FHA and $546,250 for Conforming
Orange County $625,500 for FHA and $625,500 for Conforming
Los Angeles County $625,500 for FHA and $625,500 for Conforming
The max conventional and FHA loan amount in Riverside and San Bernardino county is currently $500,000, but starting October 1st, 2011, it will drop by $144,650 for FHA , and for conventional loans, it will drop $83,000.
If you live in a high-cost area, or a former high cost area, mortgage rates may be low, but the amount of loan for which you qualify may be much less than you expect. You may find yourself ineligible to use a low down payment FHA loan to purchase your home, thus requiring you to with a HUGE down payment.
Whether you’re planning a refinance or a purchase a home, keep an eye on the calendar and act sooner…..contact Crestico today!
