Great news for home buyers in more expensive areas of California and the rest of the U.S. wanting to use a FHA loan to purchase their house. FHA has now removed the requirement for two appraisals on ”high balance” FHA loans. A high balance FHA loan is considered a loan over $417,000. Currently, a borrower in many more expensive parts of the U.S. can go up to a maximum FHA loan of $729,750 on a FHA loan. Previous to this change, a borrower would need to pay for two full separate appraisals on any FHA loans over $417,000.
This is a nice change as having to get two appraisals added to expense and made purchases with FHA jumbo loans much more complicated and drawn out. This rule also includes FHA rate/term and cash out refinances. You can get a cash out refinance on a FHA loan up to $729,750 and only one appraisal will be required.
With an FHA loan limits in the more expensive counties of the U.S. and California being $729,750, this means you could purchase a home for $756,217 and only put the FHA minimum down of 3.5%. This will be handy in 2010 as many of the coastal properties in Los Angeles, San Diego, Orange County, San Jose and other areas are coming down to fit into this price range. Deals can be had. Additionally, if you have not owned in three years you are likely eligible for the $8,000 home buyer tax credit if you go into contract on a house by April 2010, or also the $6,500 tax credit if you own currently and will be moving to a new primary residence.
And here are some highlights to FHA loans:
- More flexible qualification with FHA loans vs conventional loans
- FHA loan interest rates are still extremely low
- Maximum FHA loan $729,750 in many areas of California and the U.S.
- Only 3.5% down payment required and that 3.5% can even be a gift from a relative
- Non-occupying co-signers are allowed to help your qualify
- FHA loans are for everyone not just first time home buyers!
- You can have up to 9 other mortgage loans and still get a FHA loan
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
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