New FHA Loan Limits

It appears something is happening. As of today, March 4th, FHA is increasing its loan limits to hopefully stimulate the housing market...well, we can hope. The new stimulus bill that was signed on Feb 17th - called the American Recovery and Reinvestment Act of 2009 - allows for higher loan limits on FHA transactions. These are temporary loan limits starting March 4th until the end of the year, December 31st, 2009. Transactions must close by the 31st in order to access the higher loan limit, with no exceptions.

Below are the temporary loan limits:

• 1 unit $417,000


• 2 units $533,850


• 3 units $645,300


• 4 units $801,950

This is great news and will allow access to additional transactions that we would have not been able to do before. Remember the advantages of the FHA program:

• 3.5% down payment (1-2 Unit)


• 10% down payment (3-4 units)


• The down payment can be a 100% gift from a relative


• No minimum credit score (unlike conventional programs)


• No reserves required (unlike conventional programs)


• 2 years from a Bankruptcy discharge date (4 years for conventional)


• 3 years from a Foreclosure discharge date (4 years for conventional)


• 85% of rental income is added to borrower's income (75% for conventional)


• No owner occupied borrowers (Kiddie Condo - parents, etc...)


• Renovation Loans allowed

Rubloff Wells Fargo, also known as RWF Mortgage, has been successful securing these loans. For more information, contact Brian Cumpton at www.chicagolender.com. Tell him Andy Gersten sent you. Remember these new guidelines are only in effect through December 31, 2009.