Urgent News! FHA Reduces Maximum Loan Limits!

FHA Loan Limits Reduced!

I thought that you would be interested to know that FHA recently announced a reduction in loan limits for FHA insured mortgages. FHA loan limits are impacted by median home prices and even as home prices have fallen FHA has maintained the loan limits at the higher level over the past 3 years.

FHA Loan limit in Oakland, Macomb and Wayne Counties has been at $297,500 over the past couple of years. That limit is being reduced to $271,050 as of October 1st!

What does this mean to you? If you are a Realtor working with a FHA pre-approved buyer then the maximum amount they can borrow has just gone down by over $26,000 and so has the max purchase price of the homes they should be looking at. If you’re a homebuyer using an FHA loan then you’ll need to keep the price range of home you are looking at around $280,000 in order to get maximum financing.

Any loan in process that has a base loan amount over $271,050 must close prior to September 30, 2011 or it will be subject to the new loan limits!