January 6, 2004
HUD ANNOUNCES HIGHER FHA HOME LOAN LIMITS TO HELP MORE
AMERICAN FAMILIES BECOME
WASHINGTON - Housing and Urban Development Acting Secretary
Alphonso Jackson today announced that the Federal Housing Administration (FHA)
has increased its single-family home mortgage limits by more than three
Effective January 1, 2004, FHA will insure single-family home mortgages up to $160,176 in low cost areas and up to $290,319 in high cost areas. The loan limits for two-, three- and four-unit dwellings also increased. The FHA is sending letters to thousands of mortgage lenders and brokers to make them aware of the higher rates that can help families.
"These higher loan limits will help
the FHA mortgage insurance program keep pace with the robust housing market while
contributing to the Bush Administration's commitment to create 5.5 million new
minority homeowners by the
end of the decade," said Jackson. "The new limits will help create more homeowners, more construction, more jobs, and more economic growth."
Low-income and first time homebuyers are attracted to FHA-insured loans
because the agency requires only a
three-percent down payment. Consumers can find out more details by calling HUD's Denver Homeownership Center
at 1-800-543-9378, extension 1005 for Customer Service.
The new loan limits are part of an
annual adjustment HUD makes to account for rising home prices. Under federal
law, loan limits are tied to the conforming loan limits of Freddie Mac and Fannie Mae, federally chartered corporations that buy and package mortgages.
ago, the loan limits ranged from just $115,200 to $208,800, levels below the cost
of many homes in many communities. As a result, families who needed FHA mortgage
insurance to qualify to buy a home were effectively locked out of the process.
-more- HUD No. 04-003 Page 2 The higher FHA loan limits will not cost the government
any money, because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA insurance.
The increases will also benefit
senior citizens who qualify for FHA-insured reverse mortgages. Reverse mortgages
allow homeowners age 62 and older to borrow against the value of their homes without selling them. Homeowners
can select a lump-sum payment, monthly payments or tap into a line of credit. No repayment is required as long as
a homeowner lives in a home with a reverse mortgage. The reverse mortgage is repaid, with interest, when a homeowner sells the home or dies.
HUD is the nation's housing agency committed to increasing homeownership, particularly
among minorities, creating affordable housing opportunities for low-income Americans,
supporting the homeless, elderly, people with disabilities and people living with
AIDS. The Department also promotes economic and community development as well
enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.