FHA Increased Loan Limits

In response to mortgage guideline tightening, the federal government officially raised the Federal Housing Administration’s (FHA) loan limits for 1-4 family homes.

The updated FHA guidelines will increase loan limits in Essex, Middlesex, Norfolk, Plymouth and Suffolk County by 125% of the area’s median selling price – from $362,790 to $523,750.

Fannie Mae and Freddie Mac conforming loan limits have also increased. Single-family mortgages priced up to $523,750 will be available at lower interest rates than in the recent past when jumbo loans above $417,000 carried a higher interest rate. Loan limits for 2 and 3 family homes have also been increased in the five county Metro Boston region to $670,500 and $810,450 respectively. The new loan limits apply to FHA and Fannie Mae and Freddie Mac conforming loans.

According to 2007 NAR President Pat V. Combs, these reforms, included in the Economic Stimulus package, “will offer home buyers a safer alternative to riskier mortgage products and will help many homeowners who may be facing foreclosures."

Importantly, the new higher Fannie and Freddie conforming loan limits are temporary and only apply to loans made between July 1, 2007 and December 31, 2008. This week, both the Massachusetts Association of Realtors® and National Association of Realtors® put a Call to Action to REALTORS® to contact your local federal legislators to make the increased loan limits permanent.

The NSAR Government Affairs Committee is asking all of its members to please look out for that email and Take Action if you have not done so yet.