Washington State Mortgages, Made Clear. Buying or Refinancing? Let's find the right loan together.
HUD has released the 2026 FHA loan limits for homes located in Washington State. FHA loan limits are set each year and vary by county and by the number of units (1–4 unit homes).
These limits determine the maximum base loan amount you can finance using an FHA-insured mortgage. If your loan amount is higher than the FHA limit for the county where the property is located, you may need a different type of financing (such as a conventional or jumbo loan), or a larger down payment. [Read more…]
FHA issued an update to their guidelines (ML 2025-09) revising residency requirements for FHA mortgages. The new guidelines only allow U.S. citizens and lawful permanent residents and removes non-permanent residents from being eligible.
From Mortgage Letter 2025-09:
“Currently, non-permanent residents are subject to immigration laws that can affect their ability to remain legally in the country. This uncertainty poses a challenge for FHA as the ability to fulfill long-term financial obligations depends on stable residency and employment.”
This is an evolving situation. I expect other government backed loans to follow suit. Stay tuned.
In this episode of Seattle Real Estate Chat, Jim Reppond and I discuss FHA’s HAWK program with special guest, Frances Flynn Thorsen.
Today, HUD Secretary Shaun Donovan testied before the House Committee on Financial Services addressing the financial health of the FHA mortgage insurance fund. You can read his prepared testimony here.
Donovan has pledged to reduce the allowed seller contribution (currently at 6%) and to bring it down to "more of the norm". Currently, with a conventional mortgage, if you have less than 10% down payment, the maximum seller contribution that is allowed is 3%.
Mr. Donavan also addressed increasing the annual mortgage insurance rate (paid monthly). The National Mortgage News reports that he's considering raising the annual mortgage insurance rates on FHA High Balance loans. In the greater Seattle area, this would be loan amounts from $417,001 to $567,500 in 2012.
In my opinion, it would be great if HUD would revise their streamlined refi guidelines to allow borrowers to keep their existing mortgage insurance premium rates and to allow refinacing from an ARM to a fixed rate product to satisfy their "net tangible benefit" without having to meet the 5% improvement in principal, interest and mortgage insurance payment – especially when the borrower qualifies for the higher payment.
I'm also in favor of risked based pricing, which HUD tried to implement a few years ago based on credit and amount of down payment.
HUD has been threatening to reduce seller contribution for quite a while now and quite frankly, I've rarely had a seller contriubte the full 6%. The biggest impact will be when HUD raises the mortgage insurance premiums…again.
…well that's enough from the peanut gallary!
Previously I reviewed HUD’s Home Purchasing Time Line, which I found several issues with if you’re a home buyer in Washington State. If I’m going to pick something apart, it’s only right that I offer an example of how I think it should be corrected.
Below is HUD’s suggested time line.
Here is how I see a successful purchase transaction evolving. My modifications to HUD’s time line are in blue below. [Read more…]
