FHA Mortgage Limits for 2009

Secretary Preston of the US Department of Housing and Urban Development announced the new Federal Housing Administration (FHA) loan limits for 2009. Beginning January 1^st FHA will insure single-family home mortgages up to $271,050 in all areas and up to $625,500 in high cost areas.

Because of the 2008 Stimulus Package, the maximum FHA loan limit was temporarily raised to $729,750 through December 31, 2008. However, the new maximum of $625,500 is still a significant increase over the $362,790 limit in effect prior to the Stimulus Package. Secretary Preston stated "these new loan limits will ensure FHA can to continue help struggling homeowners refinance into safe, affordable government-insured loans, and allow many first-time buyers take advantage of today's buyers market".

For conforming mortgages, the Housing and Economic Recovery Act links the maximum loan limit to a house price index chosen by the new Federal Housing Finance Agency (FHFA). For 2009 the national conforming limit will remain at the current level of $417,000.

Unfortunately for those in the Triangle the news is not so good. After January 1^st FHA limits in Wake County will actually decrease from the current $295,000 to $271,050. The same is true for Johnston, Franklin and Harnett County. For Orange and Durham County there will be no change, with loan limits remaining at $334,650.

Another important item to remember is that FHA will be increasing the minimum borrower contribution on January 1^st. Currently borrowers needed to put in 3% of the sales price or appraised value (whichever is lower), but in 2009 this will increase to 3.5%. So for anyone interested in buying under the current loan amount/down payment requirements, time is short to submit an application!

One final piece of good news... FHA and conforming interest rates are again at historic lows. They now rival the interest rates available back in 2004-2006, so if you can qualify for one of these great programs now is the time to look into buying or refinancing.

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Roland Carrillo, PhD
Branch Manager
VanDyk Mortgage in Cary, NC
Email: rjcarrillo@gmail.com
Website: http://www.mymortgageanalysis.com/

Our branch specializes in affordable lending options including FHA / VA and the Community Heros program. As both a banker and a broker, you have access to a full menu of products including all Fannie Mae and Freddie Mac Conforming loans, Reverse, Jumbo and Commercial financing on a variety of property types. We are located in Cary, North Carolina and are within easy reach of the entire RTP Area including Wake, Durham and Orange Counties.