Presented By

Sue Martin
Coldwell Banker Myers-Gallagher
361-758-7534

WASHINGTON - Nearly a quarter of a million more families could be eligible this year to purchase or refinance their homes using affordable, FHA-insured mortgages, thanks to the economic growth package signed into law by President Bush last month. The Economic Stimulus Act of 2008 will allow HUD's Federal Housing Administration (FHA) to temporarily increase its loan limits and insure larger mortgages at a more affordable price in high cost areas of the country.
"The stimulus,” said HUD Secretary Alphonso Jackson at a Greater Las Vegas Association of Realtors keynote speech, "raises the Federal Housing Administration's loan limits, enabling more families to qualify for a safe, affordable FHA mortgage. Families with home loans up to $729,750 will now qualify for an FHA loan, depending on where they live."
Beginning today, HUD will offer temporary FHA loan limits that will range from $271,050 to $729,750. Overall, the change in loan limits will help provide economic stability to America's communities and give nearly 240,000 additional homeowners and homebuyers a safer, more affordable mortgage alternative. The maximum amount of $729,750 will only be applicable to extremely high-cost metropolitan areas such as: New York, Los Angeles, San Francisco and Washington, D.C.
"Many families all over the U.S. will benefit from this access to credit, and increasing these loan limits will inject much-needed liquidity into the housing market," said FHA Commissioner/Assistant Secretary for Housing Brian Montgomery. "Even moderate-cost areas like those in the South and Southwest such as Dallas, Houston, Augusta and Tallahassee will be helped, with most loan limits there rising to $271,050."
The Economic Stimulus Act of 2008 permits FHA to insure loans on amounts up to 125% of the area median house price, when that amount is between the national minimum ($271,050) and maximum ($729,750).
By increasing loan limits nationwide, FHA will provide much needed liquidity and stability to housing markets across the country. From September to December 2007, FHA facilitated more than $38 billion of much-needed mortgage activity in the housing market. By focusing on 30-year fixed rate mortgages, FHA helps homeowners avoid and escape the risks associated exotic subprime mortgage products, which have resulted in rising default and foreclosure rates.
In January 2009, FHA's maximum loan limit will return to $362,790, unless the U.S. Congress approves bipartisan legislation to permanently increase loan limits as part of the FHA Modernization bill, which is still awaiting final approval on Capitol Hill.
Jackson said. "We need a more permanent solution. So our next step must be to modernize the 74-year-old FHA. FHA modernization could help a quarter of a million families this year alone. It passed the House and Senate in overwhelmingly bipartisan fashion. But a final bill has yet to reach the President."
"We can create the conditions for recovery," Jackson said. "We can make the boom-bust cycle shorter and shallower. We can replace gimmicks and shortcuts with transparency and honesty.
Jackson said" Americans are a fair people. They (Congress) want to help. But they understand that the answer to an economic challenge must ultimately come from the people who drive the economy. They want the tools of recovery in their own hands. And they do not want to kill the spirit of opportunity that made this country great."
FHA loan limits are based on the county in which the property is located and the new temporary FHA loan limits are posted on the HUD website.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on our website www.texascoastproperty.com, click on HUD-HUDEspanol-FHA.
For more information about qualifying to purchase a home, I invite you to talk to your local Realtor at Coldwell Banker Myers-Gallagher. Call 361-758-7534, email info@texascoastproperty.com