CommonWealth Real Estate Your Way, Brodheadsville
Pocono and Lehigh Valley Real Estate Blog

VA-FHA

Bill Cullen

Home buying Alert. In November of 2011 President Obama signed HR 2112, the Consolidated and Further Continuing Appropriations Act of 2012 into law renewing the expired higher loan limits for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans for an additional two years, through Dec. 31, 2013. This means that the higher loan limits are set to expire at the end of 2013, which is less than two months from now. What does this mean? With regard to FHA loans, areas that allow “high cost” limits will be lowered from $729,750 to $625,500 without further Congressional action. In addition, areas which are higher than the base limits of $271,050 floor for FHA loans in low cost areas will also see a reduction of approximately 10% of allowable loan amounts if area home prices have not increased significantly enough to offset this decrease. While those seeking a mortgage under $625,500 can turn to conforming alternatives which require a 5% down-payment rather than FHA’s 3.5% required — loans above $625,500 may require a down-payment as much as 10% unless private lenders change their guidelines at the same time. The bottom line is that anyone thinking about purchasing a home and needing a minimum down payment before the end of the year should consider acting quickly. As of the date of this article, neither FHA nor VA have issued letters with instructions indicating how the new limits will be phased in if Congress does not act, however, purchasing in November should put you in position to beat any deadlines.

Bill Cullen – Branch Manager
Franklin American

Commonwealth Real Estate Your Way, LLC..... RB# 066860..... Office: 570-972-0155


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