Higher Loan Limits Reinstated for FHA Loans

The US Senate and House of Representatives voted to pass the bill on Thursday that will bring back the  maximum size of loans that FHA guarantees to $729,750 with 3.5% down for high cost areas. This limit was first implemented three years ago in the midst of the mortgage crisis but had expired in October of 2011. Once expired, the loan limits for FHA had fallen to $625,500 in over 600 high cost counties. This newly reinstated loan limit provides borrowers with the option to choice a Jumbo loan with at least a 20% down payment or acquire an FHA loan with a much lower down payment but the added cost of  insurance premiums. The choice will require borrowers to research and decide which option is best for their situation. To learn more about each type of loan and which will work for your situation, click HERE and contact one of your local branches.