FHA Loan Limits May Decline in the Fall

July 1, 2011 by · Leave a Comment 

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. Congress could step in and do that again later this year but the general sentiment at this point is that they won’t. The effect would be that FHA loan limits would likely decline in 669 of the 3,334 US counties or county equivalents that are eligible for FHA mortgage insurance. This decrease 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. For more details on this subject, click on the following link:

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

FHA MIP Factors Increase

April 20, 2011 by · 2 Comments 

Effective with FHA Case Numbers assigned on or after April 18th, FHA increased the Annual Mortgage Insurance Premium (MIP) by .25%.  The chart below shows the old and new MIP premiums as well as how much the monthly MIP will cost for a $200,000 base loan amount.

Old FHA MIP Factors

30 Year Fixed with min 3.5% down        = .90                $150

30 Year Fixed with 5% or more down     = .85                $142

15 Year Fixed with min 3.5% down        = .25                $42

15 Year Fixed with 5% or more down     = .00                $0

New FHA MIP Factors (as of Apr 18th)

30 Year Fixed with min 3.5% down        = 1.15                $192 (increase of $42/mo)

30 Year Fixed with 5% or more down     = 1.10                $183 (increase of $41/mo)

15 Year Fixed with min 3.5% down        = .50                  $83   (increase of $41/mo)

15 Year Fixed with 5% or more down     = .25                  $42   (increase of $42/mo)

There are no changes to the Up-front Mortgage Insurance Premium, which remains at 1%.

FHA Mortgage Insurance Premiums Rising Again

February 28, 2011 by · Leave a Comment 

FHA is at it again.  Just six months after hiking mortgage insurance factors sharply, FHA has declared that it is “imperative” that its Mutual Mortgage Insurance Fund (MMIF) be “further strengthened” so that it remains “financially sound to ensure that FHA will continue its historic role of providing a home financing vehicle during periods of economic volatility and its mission of helping underserved borrowers.”  This increase was a part of President Obama’s budget proposal and it is worth noting that FHA does have the authority raise these premiums without congressional approval.  As a result, effective with FHA Case Numbers assigned on or after April 18th, FHA is increasing the Annual Mortgage Insurance Premium (MIP) by .25%.  The chart below shows the current and future MIP premiums as well as how much the monthly MIP will cost for a $200,000 base loan amount.

Current FHA MIP Factors:

30 Year Fixed with min 3.5% down = .90% ($150/mo)

30 Year Fixed with 5% or more down = .85% ($142/mo)

15 Year Fixed with min 3.5% down = .25% ($42/mo)

15 Year Fixed with 5% or more down = 0% ($0/mo)

New FHA MIP Factors (as of Apr 18th):

30 Year Fixed with min 3.5% down = 1.15% ($192 / increase of $42/mo)

30 Year Fixed with 5% or more down = 1.10% ($183 / increase of $41/mo)

15 Year Fixed with min 3.5% down = .50% ($83 / increase of $41/mo)

15 Year Fixed with 5% or more down = .25% ($42 / (increase of $42/mo)

There are no changes to the Upfront Mortgage Insurance Premium, which remains at 1%.  It is reassuring to know that FHA “anticipates that this increase will have minimal impact on borrowers but will significantly strengthen the capital position of the MMIF.”  Let’s hope they are right….

FHA Extends Temporary Condo Variances

January 31, 2011 by · Leave a Comment 

Good news to report as last week FHA announced the extension of the following 2 condo variances through June 30, 2011:

 1. FHA concentration is temporarily allowed to a maximum of 50%.  This means that up to only 50% of the units in a given complex will be able to have FHA financing.  This limit will drop to no more than 30% on July 1.

 2. Pre-sale requirements for new construction are temporarily reduced to a minimum of 30% before rising to 50% on July 1 (not that there is a whole lot of condo construction going on around anyway, but its nice to know that the FHA is looking out for us!).

 A quick reminder that to obtain an FHA condo approval:

  • At least 50% of the units must be owner-occupied
  • At least 10% of the budget must be set aside for reserves and capital expenditures
  • The HOA is required to maintain comprehensive general liability insurance covering all of the common elements, commercial space owned and leased by the owner’s association, and public ways of the condominium project

2011 FHA Loan Limits

December 21, 2010 by · Leave a Comment 

For the second straight year, the FHA loan limits for the metro-Atlanta area are staying the same.  With values declining in 2010, this is excellent and welcome news. The 2011 limits are as follows:

  • $346,250 – 1-unit property
  • $443.250 – 2-unit property
  • $535,800 – 3-unit property
  • $665,850 – 4-unit property

FHA Condo Approvals Extended

December 20, 2010 by · Leave a Comment 

Last week, I reported that the majority of FHA condo approvals were set to expire on December 7th. This week, FHA announced that due to receiving an overwhelming number of requests all at once, they have extended all condo project approval dates as follows:

 

Initial Project Approval Dates Previous Expiration Date New Expiration Date

1972 – 1980 December 7, 2010 December 31, 2010

1981 – 1985 December 7, 2010 December 31, 2010

1986 – 1990 December 7, 2010 May 31, 2011

1991 – 1995 December 7, 2010 July 31, 2011

1996 – 2000 December 7, 2010 August 31, 2011

2001 – 2005 December 7, 2010 September 30, 2011

2006 – 2008 (Sept) December 7, 2010 March 31, 2011

 

This is certainly great news and buys some more time to close FHA condo loans without hassle. However, use this grace period wisely and pursue FHA condo approvals before the expiration date approaches. If you are involved with any condo projects, be sure to initiate the recertification or re-approval process as early as possible as it is not anticipated that any further extensions of project approvals will be issued. Please let me know if you have any questions about how to go about this.

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