Magazine article Mortgage Banking

FHA Increases Home Loan Limits

Magazine article Mortgage Banking

FHA Increases Home Loan Limits

Article excerpt

THE DEPARTMENT OF HOUSING AND URBAN Development (HUD) announced that the Federal Housing Administration (FHA) has increased its single-family home mortgage limits by more than 7 percent, effective Jan. 1, 2005. The new loan limits are part of an annual adjustment HUD makes to account for rising home prices. Under federal law, loan limits are tied to the conforming loan limits of Freddie Mac and Fannie Mae.

FHA will insure single-family home mortgages up to $172,632 in low-cost areas and up to $312,895 in high-cost areas. The loan limits for two-unit, three-unit and four-unit dwellings also increased.

"These higher loan limits will help the FHA mortgage insurance program keep pace with the strong housing market while contributing to the Bush administration's commitment to create 5.5 million new minority homeowners by the end of the decade," said HUD Secretary Alphonso Jackson. "The new limits will help create more construction, more jobs and more economic growth, while increasing homeownership. …

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