Real Estate

Loan Limits For FHA Mortgages Increasing

Home buyers using FHA mortgages backed by Fannie Mae and Freddie Mac will be able to purchase more expensive homes next year. The loan limits for popular FHA first time home buyer mortgages are going up for both traditional and “high cost counties”.

The loan limit for most counties around the USA is a maximum purchase price of $417,000 – this limit will raise to $424,100. The last time the limit was raised was in 2006. Loan limits for “high cost counties,” such as those around the DC area, will increase from $625,500 to $636,150.

The FHA loan program is a mainstay for first time home buyers who need a low down payment in order to purchase.  The down payments are just 3.5% and credit scores can be surprisingly low. The downside of the loan program is higher monthly mortgage payments caused by required mortgage insurance.


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