HUD recently announced new FHA loan limits for the Twin Cities metro.
According to the Minneapolis Area Association of Realtors, “with the amount that can be borrowed using an FHA mortgage increasing from $271,050 to $365,000, an additional 25 percent of the homes currently on the market are candidates for FHA financing. This means more than 77 percent of homes currently for sale could be purchased using FHA. This important financing option brings additional buyers into the market who could not otherwise afford to purchase these homes.
More good news: A recent court ruling allows for home buyers to continue to use certain downpayment assistance programs when purchasing a home using an FHA mortgage.”
Since there are virtually no more sub-prime loans available to the market, this increase in FHA loan limits will now pass the risk to the U.S. Taxpayer. Perhaps this is the only way out of the housing mess. I don’t know, but make no mistake, we are now transferring individual and corporate risk to the taxpayer.
All that said, this is some good news for sellers.
[...] While the FHA loan limits have increased to $365,000 in the Twin Cities, the Feds did not see to it to raise the conforming loan limits for the Twin Cities. There’s a formula that’s involved in determining who gets the new conforming loan limits and because the overall median sales price in the Twin Cities metro is so low, they will not be raising the limits here. Here are the new temporary jumbos loan limits. In other words, if you were waiting for the government to help bail this market out, it’s not going to happen. [...]