Loan Limits

HUD Increases Loan Limit on FHA Loans Due To Surging Housing Prices

What goes up normally comes back down. At least in the housing market, the sudden rapid rise in home prices in such a short period of time is a sign of a housing bubble. The rapid fast appreciation of homes is a concern to government mortgage agencies such as FHA, VA, USDA. Fannie Mae and Freddie Mac is concerned as well about the rapid growth of housing prices. All government agencies are doing everything possible to avoid another housing and credit meltdown.

HUD Concerned of Surging Home Prices

HUD reduced the loan to value cap from 85% to 80% on cash-out refinance FHA loans. The Veterans Administration reduced the loan to value cap from 100% to 90% LTV on cash-out refinance VA loans. The Federal Housing Finance Agency (FHFA) and HUD have increased Conforming and FHA loan limits for the past eight years due to the skyrocketing home prices nationwide. There is more demand versus inventory of housing. To add fuel to the fire on a hot housing market, mortgage rates are at a historic low.

Home prices are continued to increase with no signs of a housing correction. HUD and the FHFA keep on increasing the FHA and Conventional Loan Limits due to so many homebuyers being priced out of the market due to escalating home prices.

After the Federal Reserve Board lowered interest rates to zero percent, mortgage rates plummeted hitting new record lows for the past six months. Mortgage rates are expected to remain the same or lower for the next 18 to 24 months. The whole country is going through a refinance boom. Most lenders are at full capacity in taking new mortgage loan applications due to the sheer volume of new loans. It normally takes 45 days to close on a  purchase and 90 days to close on a refinance loan application due to the historic volume of applicants. In this article, we will discuss and cover HUD Increases loan limit on FHA loans To $498,297 on single-family homes. Speak With Our Loan Officer for Mortgage Loans

Conforming Increases Loan Limit Following HUD Increases Loan Limit on FHA Loans

HUD (the parent of FHA) announced the new loan limits to the single-family home loan limits for 2024 on FHA loans.  The new FHA loan limit for 2024 on FHA loans will increase to $498,297. Many counties throughout the country have higher home prices than regular areas. This holds especially true for many counties in California, New Jersey, and Colorado. HUD has always set higher loan limits on FHA loans in high-cost counties. HUD increased the loan limit on high-balance FHA loans in high-cost areas to $1,149,825. The bottom line is the new 2024 FHA loan limits will increase in 3,108 counties. In 125 counties, FHA’s loan limits will remain unchanged.

For Alaska, Hawaii, Guam, and the Virgin Islands the ceiling will be $1,724,725. The new 2024 FHA loan limits take effect on January 1st, 2024.

One of the biggest problems many homebuyers have with FHA loans is due to the loan limit being substantially lower than conventional loans. You can get almost $200,000 more in buying power with conventional loans. FHA loans benefit borrowers with lower credit scores, outstanding collections and charged-off accounts, and higher debt to income ratios. FHA loans are the easiest loan program to get an approve/eligible per automated underwriting system for borrowers with larger collections and charged-off accounts and higher debt-to- income ratios. Gustan Cho Associates has no lender overlays on government and conventional loans. Over 80% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders due to their lender overlays.

Agency Guidelines Versus Lender Overlays

Gustan Cho Associates just go off the automated findings of the AUS and have no additional lender overlays. We have a national reputation of being a one-stop mortgage shop. Besides not having any lender overlays on FHA, VA, USDA, and Conventional loans, Gustan Cho Associates has over two dozen relationships with non-QM wholesale lending partners.

Some of our popular loan programs include 12-month bank statement mortgages, non-QM jumbo loans, asset-depletion loans, fix and flip loan programs, and dozens of other non-QM and alternative loan programs not offered anywhere else.

To qualify for a mortgage with a mortgage company with no lender overlays on government and conventional loans, please contact us at Gustan Cho Associates at gcho@gustancho.com. Or call us at 800-900-8569 or text us for a faster response. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays and fill form according to your requirements