This is good news! Higher loan limits will make mortgages more accessible for hard-working middle-class families throughout the country. In fact, nearly two-thirds of buyers who will be helped by the loan limits extension have incomes below $100,000. On flood insurance, the extension until December 16th ensures no lapse, but we still need to push for Congress to pass the five-year reauthorization.
In 2010, the FHA was used by 56 percent of all first-time homebuyers, and 85 percent of borrowers obtaining homes at the higher loan limits had incomes below $150,000. In addition, 60 percent of all African-American and Hispanic homebuyers used FHA.
The truth is that it actually depends a lot on where in the country the borrower lives. Geography often dictates what the price of “affordable housing” is. Last month’s reset to 115 percent impacted 669 counties in 42 states and territories, with an average loan limit reduction of more than $68,000. We support giving middle-class borrowers the same access to affordable mortgage financing, no matter where they make their home.
For example, many people think of California as a high cost state, and there are many areas where it is. San Francisco will benefit because many middle class homes bump up against the $729,750 limit. What many people don’t know is there are many counties in California that are not considered high cost and will benefit. Take Fresno County, for example, prices will go from $281,750 to $311,250 to qualify. As you can see, this really benefits consumers no matter where they live.
In Arizona the legislation will raise the FHA loan limit from the current $270, 050 to $346.250. This is a whopping $76,200. increases. It may not sound like much but if you have your home listed for sale at $325,000 the new legislation will increase your pool of buyers substantially!