Orange County "High Balance" FHA Loans to $625,500 with 3.5% Down Payment

In Orange County, CA the 2009 loan limits are $625,500 for an FHA mortgage. This is a big increase from the low limits FHA used to have in Orange County. Until March of 2008, when FHA implemented a temporary increase for the remainder of 2008, the maximum FHA loan was only $362,790.

A $625,500 loan will buy a nice home in Orange County. A home buyer can purchase a home for approximately $650,000 with only a 3.5% down payment. Realistically, even a buyer with a 10% down payment may need to take a serious look at FHA for their loan. It has become very difficult, especially on Conventional loans over $417,000, to get PMI (Mortgage Insurance) when there is only 10% for down payment. To make matters worse, if the borrowers FICO score is under 700 they may need 20% down on a Conventional loan.

This is not the case with an FHA loan. On FHA loans over $417,000, even a borrower with a 620 FICO score can buy a $650,000 home with 3.5% down.

FHA Works with more than 3.5% Down Payment

That should seem obvious. In situations where the buyers FICO score is below 700, or worse, below 680, the interest rate can really jump up on a Conventional loan at 90% and 85% loan to value. On an FHA loan, there is generally not a difference in interest rate for someone with a FICO of 720 or 620. Anyone having a tough time trying to do a Conventional loan with 10% down or even 15% down, should check out what an FHA loan can do for them.

Authored by Tim Storm, CMPS, Sr. Loan Officer with Frost Mortgage, a Direct Endorsed FHA Lender located in Irvine, CA. For information on FHA, or to be prequalified please call 877-786-4243 x 7.