FHA home loans are federal assistance mortgages made by lenders, and backed by the government. The FHA doesn’t make loans to Washington State homeowners — it insures loans made to homeowners by federally-qualified lenders.
By all accounts, FHA home loans are surging in popularity.
- 2006, FHA insured 3.3% of all mortgages made
- Q2 2009, FHA insured 19.2% of all mortgages made
A major reason for the increase can be tied to guidelines.
As compared to its conforming mortgage cousins Fannie Mae and Freddie Mac, FHA home loans have lower downpayment requirements and looser credit standards. The FHA allows downpayments of 3.5 percent for homes in Olympia and Fannie Mae and Freddie Mac do not, as an example.
Another reason is that FHA home loans aren’t subject to credit score fees the way that conforming mortgages are. Through Fannie or Freddie, a home buyer with a 650 FICO and 20% down is subject to 3% in risk fees. Via the FHA, the fee is zero, making FHA the better “deal”.
The FHA published its 2010 loan limits. There’s no change from 2009.
The base 2010 FHA loan limits are:
- 1-unit : $271,050
- 2-unit : $347,000
- 3-unit : $419,400
- 4-unit : $521,250
We say “base” because these loan limits don’t apply to all areas equally. Higher-cost regions get higher loan limits, based on typical home values. Homes in Thurston County WA, for example, can be FHA-insured up to $361,250 in 2010. Homes in King County WA/Seattle , for example, can be FHA-insured up to $567,500 and there are special exceptions made for Alaska and Hawaii.
The official FHA announcement included a complete, county-by-county FHA loan limit list. The first spreadsheet shows each county at or above the $729,750 maximum; the second list is everyone else.
If your home’s county is on neither list, use the “base” numbers above or call us at CU Mortgage Division and we will confirm what the limit is for your county.
Visit www.cumortgagedivision.com for a FREE FHA Loan Pre-Approval or give us a call at (360) 539-4687 to apply by phone.
