Remember back in August when we posted about potential changes to the FHA loan limits across the nation, and how they wouldn’t really affect home buyers in the Shenandoah Valley? Well, good news came last week (for those that would have been or have already been affected) as Congress passed a bill that would restore the FHA loan limits back to their original amounts at 125% of the local median home prices — up to $729,750 in the highest cost markets. One difference, though, is that Fannie Mae and Freddie Mac backed mortgages are now at a limit of 115% of the local median home price — up to $625,500. These limits will expire in 2013.
According to the National Association of Realtors®:
The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000.
This bill will also provide some additional short term relief on the National Flood Insurance Program expiration date, extending it through December 16, 2011. The NAR is pressing Congress to take this time frame to make an effort in building a five-year plan for the National Flood Insurance Program. These short-term extensions just aren’t cutting it, and home buyers deserve better.