HUD Archives: News Releases

HUD No. 10-0120
(305) 536-5678 ext. 2254
For Release
October 20, 2005


MIAMI - The U.S. Department of Housing and Urban Development has approved a $24,000 increase in the maximum mortgage amount that can be insured for single family homes by the Federal Housing Administration (FHA), a part
of HUD, in Palm Beach, Fort Lauderdale and Miami.

The increase is effective immediately and is based on a request and recent home sales data submitted to HUD by
the Realtors Association of the Palm Beaches.

As a result of HUD's decision, the FHA mortgage insurance limit on one-family homes will rise from $280,000 to $304,000; the FHA mortgage limit on two-family homes will rise from $315,368 to $342,400; the FHA mortgage limit
on three-family homes will rise from $383,157 to $416,000; and the FHA mortgage limit on four-family homes will rise from $442,105 to $480,000.

"The cost of housing in South Florida has increased substantially over the past few years," said HUD Miami Field
Office Director Armando Fana, "FHA backed loans continue to be an important tool for home buyers who face downpayment and credit barriers. The increased limits allow FHA to remain competitive in the market and responsive to those who want to own a piece of the American Dream."

The increase in loan limits will enable more working families to become homeowners and will help the FHA mortgage insurance program to keep pace with the robust housing market. Low-income and first time homebuyers are
attracted to FHA-insured loans because the agency requires only a three percent downpayment and permits family and friends to contribute to the initial home buying expenses. In addition, FHA has more relaxed credit standards
and permits borrowers to carry more debt than private mortgage insurers typically allow.

The increase was very well received in the community, especially by the Realtor Association of Greater Fort Lauderdale, which had also petitioned HUD for a raise in the limits. "We are taking a another look at FHA financing since it's getting easier, faster and overall a great mortgage product," said Jesse Acevedo, Director of the Realtor Association of Greater Fort Lauderdale.

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 the homeowner lives in a home with reverse mortgage. The reverse mortgage is repaid, with interest, when the 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; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as
well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and


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