Congress passed legislation on Thursday that calls for the loan limits of FHA insured mortgages to be restored to their pre-October 1st limits. President Obama signed the bill into law on Friday and the increased limits will stay in effect until 2013.
The increased loan limits are limited to FHA mortgages. Fannie Mae and Freddie Mac dropped their maximum loan limits in Riverside and San Bernardino counties October 1st from $500,000 to $417,000. This is the first time that Fannie Mae and Freddie Mac limits are lower than the limits for FHA insured mortgages.
Prior to passing the bill the FHA loan limit was $355,250 for both San Bernardino and Riverside counties. Now home buyers looking up to $500,000 can purchase a home with as little as 3.5% down. This is great news as the market above $355,000 had really begun to stall. Many Realtors and lenders are not aware of the changes yet, so if you are looking in the 355-500k range, now is the time to act!