FHA: 15 CA Counties Qualify for Max Loan

Only 15 counties in California will qualify for the maximum $729,750 loan limit under the economic stimulus bill that temporarily increases loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Administration, according to an FHA official. This translates into six to nine metropolitan statistical areas in the lower 48 states where Fannie, Freddie, and FHA lenders will be able to make a $729,750 jumbo loan, one expert said. FHA Director Joanne Kuczma said HUD should be ready to issue guidance on the MSAs affected by the stimulus bill in a few weeks. The mortgagee letter has been crafted, and now it needs to be cleared by the Department of Housing and Urban Development, she told the finance committee of the National Association of Home Builders. The stimulus bill increases the Fannie and Freddie loan limit from a floor of $417,000 to 125% of median home prices in high-cost areas, with a cap of $729,750. The NAHB said it expects this to increase the GSE loan limit in 29 MSAs. Meanwhile, the floor for FHA loans rises from $200,160 to $271,050. Nearly 85% of counties will have a 125% median house price that falls between $271,050 and $729,750, the FHA director said. HUD generally sets the MSA loan limit based on the highest-priced county.