I've been following this because some folks I respect in the mortgage industry have been touting that the former higher "temporary" FHA loan limits are in effect as of November 18, 11. Tonight I received this from HUD which would lead you to believe this is true:
On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages.
Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect.
As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11:
- Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11.
- Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29.
The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame.
With FHA loans, it's important to wait for the Mortgagee Letter or memo from HUD to confirm the change. Once the ML letter is issued, FHA loans in Seattle will have the loan limit for 1-unit properties of $567,500 applies.
As of now, Wednesday, November 23, 11, lenders (at least the major banks we work with) are not lending at the higher restored loan limit as of November 18, 2011. It appears this may change…we'll need to wait for the mortgagee letter from HUD and then wait to see when banks and wholesale lenders adopt the changes.
Stay tuned – I'll keep you posted.