Senator Isakson Proposes Bill to Keep FHA Loan Limits from Declining

 

In one of my July newsletters, I included a warning that FHA may reduce the FHA maximum loan limits this fall as a “sunset provision” is set to expire on Sept 30th. Traditionally, FHA has set the maximum loan limit in each county in the US based on the median house price in that county. For the last three years, in an effort to mitigate the effects of the economic downturn and the sharp reduction of mortgage credit availability from private sources, Congress has temporarily increased FHA max loan limits to propped up amounts. The general sentiment this time around is that Congress is not going to step in and approve propped up amounts again this year. However, worth reporting, Georgia’s own Johnny Isakson, along with Robert Menendez of NJ, has introduced a bill which would extend the current FHA levels for another year. If passed, this should prevent FHA loan limits from declining in 669 of the 3,334 US counties or county equivalents eligible for FHA mortgage insurance. If the loan limits are lowered, this would take effect for FHA Case #’s ordered on or after October 1, 2011. In the metro-Atlanta area, the limit would decline by $25,400 from $346,250 to $320,850. Hopefully, Congress steps in and keeps all the max FHA loan limits at today’s levels. NAR certainly supports this position as do many Congressman. However, a large number also feel that the present housing crisis was brought on by irresponsible practices and that FHA must not continue to falsely prop up limits. A month away from the deadline, it appears this fight could go either way. Needless to say, I will keep you posted. For more details on this subject, click on the following link:

 

http://portal.hud.gov/hudportal/documents/huddoc?id=FHA_Loan_Limits_HERA.pdf

 

 

August 30, 2011 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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