Raising the Loan limit, who could imagine?
By admin | June 11, 2007
The FHA is seeking to raise its current loan limits to be competitive with other mortgage purchasers including Fannie Mae and Freddie Mac. In high cost areas the FHA is looking to raise the limit to 100% of the loan limits offered by the other two and in low cost areas to increase the percentage by 19% up to 67%.
“If it were increased, it would provide more options,” says Delbert F. Reynolds, Wisconsin field office director for the FHA. “Loan limits aren’t the only issue. One of the points of modernizing is to do some catch up with other tools, like not requiring a down payment.”
This is just one of the helpful changes the HUD is looking to change in the modernization of the FHA which also includes eliminating down payment requirements which previously required 3% down payment.
The changes could bring the FHA Loan back into the spotlight and up to date with the stiff competition in the loan industry.
“There are other agencies that have loan programs, that offer loan down payments, and that are targeting the portion of the subprime market with prime or close to prime. As a person who follows housing policy and finance, I don’t think of the FHA hardly ever,” Smith says.
Keep up to date with all your FHA news here at FHAday.com.
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