President Obama has reinstated the higher FHA loan limits that recently expired on October 1st. FHA can now insure loans up to $729,750 from the previous amount of $625,500.
The increase might not seem significant, but it is particularly inportant in areas where real estate is more expensive, like Fairfield County. For example, San Francisco (another expensive real estate market) home sales of $500,000+ dropped 20% in October compared to a year ago.
The move is contradictory to the goverment’s long term plan of reducing the FHA market share. In the short term, however, this move adds more flexibility to loan officers who are having a difficult time securing financing from cautios private lenders.
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