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Metropolitan areas to be hit by new FHA limits

Posted on: 27th Jan, 2014 04:12 am
According to a report published by the Urban Institute, the reduced FHA loan limits will have deep impact on the minority borrowers and potential homebuyers in the metropolitan areas. Part of the change is due to a reduction in the loan ceiling for high-value areas, which dropped from $729,750 to $625,000, and changes in the formula to determine loan limits in high-value areas that do not reach the ceiling.
It should also be noted here that a much bigger impact of FHA limits is due to a change in how median home prices are determined. Prior to Jan. 1, 2014, the FHA based its determination of median home prices on pre-2008 home values; under the new formula, home values are based on their highest level since the crash in 2008.
Posted on: 27th Jan, 2014 07:54 pm
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