PRESIDENT'S ECONOMIC RECOVERY PACKAGE TO MAKE MORE FAMILIES ELIGIBLE FOR FHA-INSURED MORTGAGES
FHA implements temporary higher loan limits in Anchorage, Fairbanks, Juneau, Sitka, Denali, Dillingham, Kodiak Island and other areas to help families keep their homes

WASHINGTON - More American families will be eligible this year to purchase or refinance their homes using affordable, FHA-insured mortgages, thanks to the economic stimulus package signed into law by President Obama on Tuesday. The American Recovery and Reinvestment Act of 2009 will allow HUD's Federal Housing Administration (FHA) to temporarily increase its loan limits and insure larger mortgages at a more affordable price in high cost areas of the country.

"This is one of many elements in the President's stimulus package that will aid homeowners and homebuyers in
dealing with the volatile mortgage market," said HUD Secretary Shaun Donovan. "These loan limit increases will help FHA continue to provide safe, affordable mortgage products to families in all areas of the nation."

Beginning today, HUD will offer temporary FHA loan limits that will range from $271,050 to $729,750. The maximum amount of $729,750 will only be applicable to extremely high-cost metropolitan areas such as: New York, Los
Angeles, San Francisco and Washington, D.C.

In Alaska, today's announcement will affect loan limits in the following communities:

• In many of Alaska markets, the FHA mortgage limits will remain the same as those that took effect on January 1, 2009 - the FHA limit on a one-unit house in these markets is $271,050 ; on a two-unit house is $347,000;
  on a three-unit house is $419,400; and on a four-unit house is $521,250.



• In the Anchorage and Matnuska-Susit area, the new FHA limit on a one-unit house will be $347,500 ; on a
  two-unit house will be $444,850 ; on a three-unit house will be $537,750; and on a four-unit house will be
  $668,250.



• In the Fairbanks area, the new FHA limit on a one-unit house will be $316,250; on a two-unit house will be $404,850; on a three-unit house will be $489,350; and on a four-unit house will be $608,150.



• In the Juneau area, the new FHA limit on a one-unit house will be $398,750: on a two-unit house will be $510,450; on a three-unit house will be $617,050; and on a four-unit house will be $766,850.



• On Kodiak Island, the new FHA limit on a one-unit house will be $318,750; on a two-unit house will be
  $408,050; on a three-unit house will be $493,250 ; and on a four-unit house will be $613,000.



• In the Sitka area, the new FHA limit on a one-unit house will be $431,250; on a two-unit house will be $552,050; on a three-unit house will be $667,350; and on a four-unit house will be $829,350.



• In the Denali area, the new FHA limit on a one-unit house will be $316,250; on a two-unit house will be $404,850; on a three-unit house will be $489,350; and on a four-unit house will be $608,150.



• In the Dillingham area, the new FHA limit on a one-unit house will be $332,500; on a two-unit house will be $425,650; on a three-unit house will be $514,500; and on a four-unit house will be $639,400.



• In the Aleutians West area, the FHA limit on a one-unit house will remain at $349,600; on a two-unit house at $447,550; on a three-unit house at $540,950; and on a four-unit house at $672,300.



• In the Ketchikan area, the FHA limit on a one-unit house will remain at $322,000; on a two-unit house at $412,200; on a three-unit house at $498,250; and on a four-unit house at $619,250.



• In the North Slope area, the FHA limit on a one-unit house will remain at $301,300; on a two-unit house at $385,700; on a three-unit house at $466,250; and on a four-unit house at $579,400.

Under the American Recovery and Reinvestment Act of 2009, the revised FHA limits for 2009 are set at the higher
of the loan limits established for 2008 under the Economic Stimulus Act of 2008 and those established for 2009
under the Housing and Economic Recovery Act of 2008. Thus the new Act permits FHA to insure loans on amounts
up to 125 percent of the 2007 area median house prices, when that amount is between a national minimum of $271,050 and maximum of $729,750.

The change in loan limits are applicable to all FHA-insured mortgage loans endorsed after HUD publishes the
increased loan limits today, and it lasts until December 31, 2009.

Increasing loan limits will help FHA continue to provide much stability to housing markets across the country.
Already, as conventional sources of mortgage credit have been contracting, FHA has been filling the void. From September to December 2008, FHA facilitated $97 billion of much-needed mortgage activity in the housing market, $35 billion of which was through FHA's refinancing products. By focusing on 30-year fixed rate mortgages, FHA helps homeowners avoid and escape the risks associated exotic subprime mortgage products, which have resulted in
rising default and foreclosure rates.

In January 2010, FHA's maximum loan limit will return to 150 percent of the conforming loan limit. That amount will likely be $625,500, unless Congress approves additional changes.

Home Equity Conversion Mortgages

FHA's reverse mortgage product known as the Home Equity Conversion Mortgage (HECM) will have a new national mortgage limit of $625,500, up from the previous limit of high of $417,000. As in previous years, the special
exception areas of Alaska, Hawaii, Guam, and the Virgin Islands may have higher loan limits.

Reverse mortgages allow homeowners age 62 and older to borrow against the value of their homes without selling them or having to make any monthly repayments. 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.

FHA loan limits are based on the county in which the property is located. However, for properties located in metropolitan or micropolitan statistical areas, the limit is set at that of the county with the highest median home
price within the metropolitan or micropolitan area.

The new temporary FHA loan limits are posted on the HUD's website.

HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.

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