FHA Jumbo Loan limits range from $271,050 to $729,750 in areas where house prices are more than the national average. To be specific, these areas include high-cost metropolitan cities where the maximum loan limits prior to the availability of jumbo loans were $362,790. Such areas exist in states like California, Texas, Florida, Colorado and New York, to name a few here.
According to the Economic Stimulus Act of 2008, FHA is allowed to insure loans with principal amount not exceeding the 125 percent of the area median house price. FHA has its own way to determine the median sales price of an area, though the data it uses comes mainly from government and commercial sources. HUD changes loan limits each year and the change is applicable to all FHA-insured mortgages.
Besides Economic Stimulus Act of 2008, jumbo loan limits are governed by the Housing and Economic Recovery Act of 2008 and the Economic Recovery and Reinvestment Act of 2009. Under the Economic Recovery and Reinvestment Act of 2009, HUD is mandated to choose the higher of limits determined under Economic Stimulus Act of 2008 and Housing and Economic Recovery Act of 2008. The higher loan limits permissible under these Acts are referred to as Expanded Loan Limit Authorities.
The requirements under an FHA Jumbo Loan program are similar to those of a normal FHA loan. The lender must evaluate the repayment capability of the borrower taking into account the various factors like stability in income, assets and good credit score. The interest rates need not be lower than the conventional rates. However, there are more flexible underwriting guidelines under an FHA loan program.
One should check with their lender whether an FHA-insured jumbo loan is available in their area. You can use the resources provided by the US Department of Housing and Urban Development to see the loan limits applicable in your areas under all kinds of FHA loans.
This resource is available at the following link:
https://entp.hud.gov/idapp/html/hicostlook.cfm.
For detailed information on all aspects of the Federal Housing Administration browse our website fha.realestatezing.com. To use various resources and view updated information, explore the website of the US Department of Housing and Urban Development.
Website: www.hud.gov
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