New FHA and Conforming Loan Limits for California Released by HUD

Almost 1 month after the H.R. 5140 Economic Stimulus Package was signed by President Bush; the Office of Federal Housing Enterprise Oversight (OFHEO) released today the maximum temporary conforming loan limits.

The new FHA loan limits as well as Fannie/Freddie Government Sponsored Enterprise (GSE) loan limit will apply to loans originated between July 1, 2007 and December 31, 2008 for one, two, three and four unit homes as determined by the U.S. Department of Housing and Urban Development.

These great news will offer some hope to struggling homeowners in California, specially in the Bay Area, that still have a little bit of equity in their home but have been desperately looking for a way to refinance and keep their homes. This temporary increase in the conforming loan limit will also influence more buyers to take a step towards homeownership.

The new FHA and conforming loan limit that applies to one-unit single family homes in San Jose – Santa Clara County is $729,750 up from $362,790 for the old FHA loan limit and $417,000 for the old conforming loan limit.

If you would like to see the new FHA and conforming loan limit for the county you live in, you may do so by visit the HUD website.

Back in the days, before the housing boom, FHA backed loans were traditionally the first choice for first time homebuyers but during the housing boom, these types of loans became outdated and inadequate just like the 30-year fixed loan did when all kinds of new creative financing loans became more popular and easy to obtain.

Californians are amongst the first ones to benefit from this loan limit increase but don’t panic because HUD is expected to raise the limits in other counties nationwide in the coming days.

San Jose residents, and everybody in the nation for that matter, should keep in mind that if you are a prospective buyer or a current refinancing homeowner, you simply can’t go down to the mortgage broker down the street and apply for an FHA backed loan. The reason for this is because there are stringent requirements to become a HUD approved FHA loan broker and not all broker are approved to do these types of loans.

Another thing to keep in mind is that although the H.R. 5140 was signed by the President and the loan limits have already been agreed upon and released by the OFHEO, there are still some details that need to be worked out like the securitization of the loans and when the FHA will begin purchasing loans from lenders at the higher new limits according to the San Jose Mercury News in the article “FHA raises mortgage limits in Santa Clara, other counties”

Should you wait until all these kinks are worked out?….Absolutely NOT!

Trust me when I tell you that you don’t want to wait until the last minute to begin preparing for your home purchase or refinance.

If you would like to see how you could benefit by refinancing with an FHA loan or buying a home with the CalHFA program which helps first time homebuyers in California, contact me directly.

Comments

5 Responses to “New FHA and Conforming Loan Limits for California Released by HUD”

H.R. 5140 Economic Stimulus Package passed new Conforming loan limits - San Jose California on March 7th, 2008 12:54 AM

[...] 03/06/08 Update: New FHA & Conforming Loan limits for California released by HUD [...]
jacek rosicki on March 7th, 2008 12:34 PM

Hi there.

Can I can a list of FHA / Hud approved mortgage brokers in Santa Clara county & San Mateo. I am looking for a company that is close to Mountain View.
Please email the info.
Thanks
Jacek
Ney on March 8th, 2008 5:28 PM

Jacek

Our sister company Acceptance Capital in Milpitas is approved to do FHA loans.

I will send you an email with my contact information.
Ney
New Conforming Loan Limit and FHA Loan Limit / San Jose California on April 7th, 2008 7:47 PM

[...] 3/06/08 Update: New FHA & Conforming Loan Limit for California released by HUD [...]
H.R. 3221 Housing and Economic Recovery Act of 2008 Passes New Permanent Loan Limits : San Jose-Santa Clara County Real Estate UNCENSORED on July 31st, 2008 1:38 AM

[...] Association of Realtors, stated “Although we would have liked Congress to make permanent the (temporary) $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California [...]