Quick primer on new California FHA loan limits

The mortgage limits set by HUD for FHA loans (Federal Housing Administration) for California counties were raised in March. The new limits are set relative to the median price of homes in each county. The bad news: the new limits will only be effective until the end of 2008.
San Diego’s limit has been raised to $697,500 from just over $362,000, while Orange County and Los Angeles county are both at the max of $729,750 now. This change comes as part of the effort to support the origination of larger mortgages, which should lead to lower interest rates. Many Jumbo loan holders or home buyers have been hesitant to finance given the high rates that Jumbo loans have experienced the past few months.

FHA Mortgage Limits in California by County

Alameda County
Median home price $995,000
new FHA Limit $729,750

Alpine County
Median home price $438,000
new FHA Limit $547,500

Amador County
Median home price $355,000
new FHA Limit $443,750

Butte County
Median home price $320,000
new FHA Limit $400,000

Calaveras County
Median home price $370,000
new FHA Limit $462,500

Colusa County
Median home price $318,000
new FHA Limit $397,500

Contra Costa County
Median home price $995,000
new FHA Limit $729,750

Del Norte County
Median home price $249,000
new FHA Limit $311,250

El Dorado County
Median home price $464,000
new FHA Limit $580,000

Fresno County
Median home price $305,000
new FHA Limit $381,250

Glenn County
Median home price $230,000
new FHA Limit $287,500

Humboldt County
Median home price $315,000
new FHA Limit $393,750

Imperial County
Median home price $260,000
new FHA Limit $325,000

Inyo County
Median home price $350,000
new FHA Limit $437,500

Kern County
Median home price $295,000
new FHA Limit $368,750

Kings County
Median home price $260,000
new FHA Limit $325,000

Lake County
Median home price $321,000
new FHA Limit $401,250

Lassen County
Median home price $200,000
new FHA Limit $271,050

Los Angeles County
Median home price $710,000
new FHA Limit $729,750

Madera County
Median home price $340,000
new FHA Limit $425,000

Marin County
Median home price $995,000
new FHA Limit $729,750

Mariposa County
Median home price $330,000
new FHA Limit $412,500

Mendocino County
Median home price $410,000
new FHA Limit $512,500

Merced County
Median home price $378,000
new FHA Limit $472,500

Modoc County
Median home price $125,000
new FHA Limit $271,050

Mono County
Median home price $370,000
new FHA Limit $462,500

Monterey County
Median home price $599,000
new FHA Limit $729,750

Napa County
Median home price $615,000
new FHA Limit $729,750

Nevada County
Median home price $450,000
new FHA Limit $562,500

Orange County
Median home price $710,000
new FHA Limit $729,750

Placer County
Median home price $464,000
new FHA Limit $580,000

Plumas County
Median home price $328,000
new FHA Limit $410,000

Riverside County
Median home price $400,000
new FHA Limit $500,000

Sacramento County
Median home price $464,000
new FHA Limit $580,000

San Benito County
Median home price $790,000
new FHA Limit $729,750

San Bernardino County
Median home price $400,000
new FHA Limit $500,000

San Diego County
Median home price $558,000
new FHA Limit $697,500

San Francisco County
Median home price $995,000
new FHA Limit $729,750

San Joaquin County
Median home price $391,000
new FHA Limit $488,750

San Luis Obispo County
Median home price $550,000
new FHA Limit $687,500

San Mateo County
Median home price $995,000
new FHA Limit $729,750

Santa Barbara County
Median home price $615,000
new FHA Limit $729,750

Santa Clara County
Median home price $790,000
new FHA Limit $72,9750

Santa Cruz County
Median home price $719,000
new FHA Limit $729,750

Shasta County
Median home price $339,000
new FHA Limit $423,750

Sierra County
Median home price $228,000
new FHA Limit $285,000

Siskiyou County
Median home price $235,000
new FHA Limit $293,750

Solano County
Median home price $446,000
new FHA Limit $557,500

Sonoma County
Median home price $530,000
new FHA Limit $662,500

Stanislaus County
Median home price $339,000
new FHA Limit $423,750

Sutter County
Median home price $340,000
new FHA Limit $425,000

Tehama County
Median home price $250,000
new FHA Limit $312,500

Trinity County
Median home price $200,000
new FHA Limit $271,050

Tulare County
Median home price $260,000
new FHA Limit $325,000

Tuolumne County
Median home price $350,000
new FHA Limit $437,500

Ventura County
Median home price $599,000
new FHA Limit $729,750

Yolo County
Median home price $464,000
new FHA Limit $580,000

Yuba County
Median home price $340,000
new FHA Limit $425,000

FHA moves to the forefront in lending again

The past couple weeks have seen significant news for Mortgage holders, lenders, and banks. Loan amount increases are official (for details click here) for FHA, FNMA, & Freddie Mac loans. This will help hundreds of thousands of US homeowners get lower rates for the purchase, refinance, or construction of their home. The benefits aren't just for people in Los Angeles ( now $729,750), Seattle, (now $569,500), San Diego (now $697,500) and other high cost areas though. Prior to the new limits, the minimum FHA loan amount in much of America was $200,160, which has now been increased to $271,050. This will help many families refinance out of Adjustable Rate Mortgages, ARM's, 80/20 combo mortgages, Option ARM's, and other risky mortgages into safe, secure, affordable FHA & FHA secure mortgages to up 97% of their homes appraised value.

Meanwhile FNMA (Fannie Mae) & FHLMC (Freddie Mac) loans became more affordable and less obtainable during the same week. While the loan limits increased for these loans, which should help many homeowners, it is now much harder to qualify for a Fannie or Freddie loan over 80% Loan to value. The reason for this is the recent changes (which start 3-17) for Mortgage insurance on these loans. The Mortgage Insurers have seen losses mount in the Billions, and have put limits on minimum ficos (anything less than 680 will be effected).

Fannie & Freddie have also limited the maximum Loan to Value (LTV) in "declining markets" such as specific counties in California, Florida, Arizona, and many more by 5-10% from prior levels. This also makes it more difficult for borrowers (even the best credit risk borrowers) to get Low Down Payment or High LTV financing in many markets.

There is the good news amidst all this doom & gloom!
FHA loans are not affected by either of these issues, the Mortgage Insurance limits on LTV or the Declining markets adjustments.

Good old FHA to the rescue.
FHA mortgage insurance premiums are self-funding. They all go into a fund that guarantees the mortgage banks in the case of default by the borrower. This program is self-funding, it is not subsidized by tax payer money, contrary to public opinion.

VanDyk Mortgage is a direct lender of FHA loans, and we have been making FHA loans for over 20 years. We are proud to have achieved the "Full Eagle Direct Endorsement" underwriter designation from HUD. This is the highest level of approval from HUD (US Department of Housing & Urban Development).

1. FHA loans require just 3% down payment (up to 97% LTV)
2. FHA loans are not limited by "declining markets" for Maximum LTV
3. FHA loans are safe, secure & affordable
4. FHA loans can work with lower credit scores than conventional loans

VanDyk Mortgage can work with tarnished credit histories to get you approved for FHA financing. Bankruptcy is OK (must over 24 months discharged for chapter 7, preferably 24 months from filing for chapter 13, although you can remain in Chapter 13 and refinance with trustee approval). FHA does prefer to see 12 months of on-time mortgage payments, 24 is even better. The FHA Secure program does allow for some late payments in certain circumstances.

Please call us at 866-900-2342 to see if you might benefit from FHA or FHA Secure financing. Brian Skaar and VanDyk Mortgage are your source for FHA financing.

www.vandykfunding.com for news, market updates, and secure loan application.

New Loan Limits released for FHA loans

HUD has finalized the new 2008 loan limits for FHA Government backed loans. The new limits increase the max loans for FHA from just over $368K up to $729,750.

Although the highest amounts are for high cost metropolitan areas such as Los Angeles, New York, & San Francisco, Every county in America benefits from an increase in the FHA loan limit from $200K to a new minimum limit of $271,050. This helps to increase the number of US households that can qualify to purchase and refinance their homes.

You can find the new limits for your area here: 2008 Loan Limits .

FNMA & FHLMC, AKA Fannie Mae & Freddie Mac, are both GSE's or Government Sponsored Enterprises that purchase loans made by Mortgage Banks that meet their criteria. The new loan limits for Fannie & Freddie rose from $417K up to $729,750 as well in many areas, depending on Geographic area based on housing prices. Many areas did experience a significant increase in this amount, even if it didn't go to the max ceiling. For instance, Seattle homes can now qualify up to $569,500, and San Diego homes now qualify up to $697,500.

Please do not hesitate to call us to find out if the new loan limits can help your financial plans.

Our toll free number is 866-900-2342, ask for Brian Skaar.

You may also apply online to get your home loan quote at http://www.vandykfunding.com/ , simply click on the Loan Application button at the top of the page.