New 2009 guidelines were recently released by FHA, Fannie and Freddie. Some things you should make note of include:
- In all AZ counties the FHA loan limit has been reduced to $271,050 with the exception of Coconino which will be $333,500. This is down from the 2008 limit in Maricopa and Pinal counties of $346,250.
- Fannie and Freddie have announced that they will leave the conforming loan limits at the current $417,000 (for all counties in AZ except Coconino which is at $450,000). In other high cost areas (San Diego & Orange County and such) it will be $625,000.
- Freddie Mac has also announced that effective 2/2/09 they will no longer purchase loans with stated income/stated assets. Lenders will implement the changes earlier than this date to insure a smooth transition. Maximum debt to income will be 45%.
What does this mean?
Better yet, where’s your opportunity?
This all means that anyone considering purchasing a home that would fall in the $271,050-$346,520 range should be looking at doing that now if you’d like to take advantage of an FHA loan. With a low initial investment of 3% and historically low interest rates combined with a discount buyer’s market, what’s holding you back?
{ 2 comments… read them below or add one }
All of that sounds well and good, but how about the years. If someone has paid down their loan to having 20 years left on a loan, I don’t think they would run into do this kind of loan knowing that hey may have to go back to a 25 or 30 year loan again.
.-= Kenneth Elliott´s last blog ..Quick Payday Loan =-.
Thanks for stopping by Kenneth! You’re right that it would probably be difficult for someone who has paid on their loan for a good number of years to start over with a new 30 year loan. So an FHA loan might not be the best option for them. But for those move-up buyers who aren’t totally upside-down in their home but won’t walk away with a lot of money to use as a down payment or for the first time buyers an FHA loan is a great option. With a down payment of 3.5% verses the 10-20% on a conventional loan it makes it much more doable for many buyers.
You also brought up an interesting question in my mind. I’ve not really ever thought about being one of those people who will pay off a mortgage. Not saying that I won’t someday pay it off and I surely don’t subscribe to having a lot of debt but it’s just not high on my list of important things like it is for some people. I’ve always pictured myself moving from house to house every so many years and starting the mortgage over. I’m going to have to chew that one over. I smell another post coming…