Ensure Your Clients Have Access to Affordable Mortgages
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On November 17, 2011 Congress restored the loan limits for FHA for two years. In late September the FHA and Fannie/Freddie Loan Limits were reduced in 42 states pricing potential home buyers out of the American Dream of home ownership and holding back the housing recovery.
NAR immediately went to work with the goal to get the loan limits restored in Congress.
The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets. The floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie and Freddie. Fannie and Freddie backed mortgages will remain at 115 percent of local area median home prices up to $625,500.
The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011.