Palm Beach Real Estate and Loans

I was contacted after last week's Update by someone who had questions about FHA Loans-

Specifically, what is an FHA Loan?

In a nutshell, an FHA Loan is is a type of mortgage that is insured by the Federal Housing Association.  This loan was desigined by our Government to make home ownership easier for low and moderate-income buyers.  It does this by allowing for extermely low down payments.  In turn it's rates are typically a bit higher than conventional loans, but the plus is that people have to bring much less cash up front.

You didn't hear about this type of loan for a few years because the the sub-prime (or garbage) loans looked like a much better choice.

Well, you see how that worked out.

I would always try to get someone in a conventional situation if possible because it would be cheaper, but if that doesn't work.....

Now, the other question was about the maximum loan amounts.

This does vary from county to county and here is a mouthful of an explanation of the limits from the US Department of Housing and Urban Development:

"The Economic Stimulus Act of 2008 permits FHA to insure loans on amounts up to 125 percent of the area median house price, when that amount is between the national minimum ($271,050) and maximum ($729,750). The new minimum and maximum loan limits are based on 65 percent and 175 percent of the conforming loan limits for Government-Sponsored Enterprises in 2008, which is $417,000."

Easy, hunh?

To find out what the maximum is in your county just go over to the HUD site.

I was asked specifically about Collier and Lee in Florida - the limit in Lee is $356,250 and in Collier $531,250.

For any other mortgage info, just give me a call-