Last week, HUD announced the FHA loan limits for 2014 with most counties in Washington having loan limits reduced from 2013 levels. In the Seattle/King County area, FHA loan amounts for a single unit dwelling will be reduced by $61,500 from $567,500 to $506,000 in 2014. Kitsap County was hit the hardest with a reduction of $167,950 for single unit dwellings. The higher loan limits that we have appreciated over the past few years were intended to be “temporary” and HUD has been attempting to shrink FHA’s footprint, so we shouldn’t be too surprised over the lower loan limits.
FHA loan limits for 2014 have been reduced from 2013. For a home located in greater Seattle, the new FHA loan limit is reduced from $567,500 to $506,000 in 2014. The reductions are across the board for Washington state counties and some loan limits are below 2014 conforming loan limits.
FHA streamline refinances without appraisals and with loan amounts over the the 2014 loan limits will not be subject to the new loan limits.
This past weekend, Fannie Mae implemented new underwriting standards raising the minimum down payment for a conventional loan from 3% to 5% down…with an exception. The exception allows for certain community based programs, like those offered through the Washington State Housing Finance Commission to still provide 3% down conventional mortgages. I have confirmed with WSHFC that the Home Advantage Program will continue to all a minimum 3% down payment.
For more information about the Home Advantage Mortgage Program, please click here.
Borrowers not wanting to have FHA mortgage insurance as part of their mortgage payment for the life of the loan have about thirty days to take action. This shouldn’t be a reason to panic.
Effective FHA case numbers issued June 3, 2013 and later, FHA mortgage insurance will become a permanent part of the FHA mortgage payment.
Why do I say “SO WHAT?”
One of my favorite blogs to follow, Get Rich Slowly, recently published Reader Stories: I bought a duplex to save money on rent. The author of the post describes how he used an FHA mortgage to buy a duplex and with renting out the unit he was not living in, he wound up paying less for his housing than when he was renting.