I recently learned about an important change to FHA loan policy.  Evidently, they recently increased FHA loan limits for interested home buyers. Continue reading to learn about this development on the Bethesda real estate market, and how it will affect you as a home buyer.

Chevy Chase Area Properties

In a letter dated December 2, the government explains the federal housing administration’s loan limits, which are in effect from Oct. 1, 2011 to Dec. 31, 2012.

Here are some of the highlights of the letter:

  • The Forward loan limits that were effective Jan. 1, 2011 to Sept. 30, 2011 will also apply to case numbers assigned from Nov. 18, 2011 to Dec. 31, 2011.
  • For those Forward mortgages with case numbers assigned from Jan. 1 through Dec. 31:
    • The FHA Floor and Ceiling loan limits will be the same as those in effect from the previous year.
    • However, the individual county loan limits have changed.
  • For those Forward mortgages with case numbers assigned from Oct. 1 to Nov. 17:
    • These mortgages are subject to the lower limits that were in effect from Oct. 1 to Nov. 17, unless they meet the criteria for exceptions to those loan limits, as outlined in Mortgagee Letter 11-29.
  • The FHA maximum loan limit and claim amount for Home Equity Conversion Mortgages was not affected.
  • The FHA national loan limit “floor” is still 65 percent of the national conforming loan limit for the period from Nov. 18, 2011 to Dec. 31, 2012. Here’s how that breaks down:
    • One Unit $271,050
    • Two Unit $347,000
    • Three Unit $419,425
    • Four Unit $521,250
  • For areas designated as high-cost in 2008 under the ESA, the FHA national loan limit “ceiling” is $729,750 for a one-unit property. The maximum FHA loan limits by property size for the period from Nov. 18, 2011 to Dec. 31, 2012 breaks down like this:
    • One Unit $729,750
    • Two-Unit $934,200
    • Three-Unit $1,129,250
    • Four-Unit $1,403,400

Navigating the Bethesda Real Estate Market

For a complete report on the recent changes to the FHA loan policy, visit http://portal.hud.gov/hudportal/documents/huddoc?id=11-39ml.pdf. The regulations surrounding loan policy can be quite complex.  For expert insight on how the changes may affect you as a Bethesda area home buyer, make sure to contact me, Melinda Estridge.

My team of Maryland real estate experts and I will be happy to walk you through the changes and answer any questions you may have.

Until next time,

Melinda