PERMANENT FHA MORTGAGE LIMITS IN MOST OREGON MARKETS TO RISE 35 PERCENT ON JANUARY 1^st

SEATTLE - The U.S. Department of Housing and Urban Development has announced that new, permanent limits on
the maximum allowable mortgages that can be insured by the Federal Housing Administration (FHA) will take effect
on January 1st, 2009.

This is the first time since January 2007 that permanent FHA limits have been raised nationwide. The new,
permanent limits also replace the temporary limits that took effect with passage earlier this year of the Economic Stimulus Act that is set to expire at the end of 2008.

"Throughout 2008 FHA-insured mortgages have served as a safe and secure harbor for homebuyers seeking refuge from a very stormy mortgage market," said HUD Regional Director John Meyers. "These new limits should insure that FHA remains competitive in the market and responsive to consumers who want to stay away from risky mortgages."

In most Oregon counties, the new, permanent FHA limit on a one-family house will increase 35 percent to $271,050
on a one-unit, single-family house, up from $200,160.

High-cost markets like the Portland metropolitan area including Clackamas, Columbia, Multnomah, Washington and Yamhill counties as well as Benton, Clatsop, Curry, Deschutes, Hood River, Jackson, Lincoln and Tillamook counties
will see higher limits than most Oregon counties. (See Details Below)

In an otherwise troubled mortgage market, FHA-insured mortgages have been an increasingly important mortgage products for those who wish to purchase a home or refinance an existing mortgage. Through the first 11 months of calendar 2008, FHA has insured 13,365 mortgages in Oregon – its third best year since FHA’s creation in the 1930’s
– with a total dollar value of more than $2.8 billion.

FHA insurance may be used for mortgages on owner-occupied, one to four-unit residential properties.  FHA insurance makes home financing more available to low-income and first time homebuyers. This is because the mortgage is backed by the full faith and credit of the government, freeing lenders from assuming the risk of default. Higher FHA loan limits do not cost the government any money because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA-insured mortgage loans.

• In most Oregon counties, effective January 1st the new, permanent FHA mortgage limit on a one-unit house
  will be $271,050; on a two-unit house will be $347,000; on a three-unit house will be $419,400; and on a
  four-unit house will be $521,250.



• In Clackamas, Columbia, Multnomah, Washington and Yamhill counties, the new FHA mortgage limit on a one-unit house will be $362,250; on a two-unit house will be $463.750; on a three-unit house will be $560.550;
  and on a four-unit house will be $696,650.



• In Hood River County, the new FHA mortgage limit on a one-unit house will be $371,450; on a two-unit house will be $475,500; on a three-unit house will be $574,800; and on a four-unit house will be $714,350.



• In Curry County, the new FHA mortgage limit on a one-unit house will be $327,750; on a two-unit house will
  be $419,550; on a three-unit house will be $507,150; and on a four-unit house will be $630,300.



• In Deschutes County, the new FHA mortgage limit on a one-unit house will be $305,900; on a two-unit house will be $491,600; on a three-unit house will be $473,350; and on a four-unit house will be $588,250.



• In Benton County, the new FHA mortgage limit on a one-unit house will be $295,550; on a two-unit house will be $378,350; on a three-unit house will be $457,350; and on a four-unit house will be $568,350.



• In Tillamook County, the new FHA mortgage limit on a one-unit house will be $287,500; on a two-unit house
  will be $368,050 on a three-unit house will be $444,900; and on a four-unit house will be $552,900.



• In Clatsop County, the new FHA mortgage limit on a one-unit house will be $281,750; on a two-unit house will be $350,700; on a three-unit house will be $436,000; and on a four-unit house will be $541,800.



• In Jackson County, the new FHA mortgage limit on a one-unit house will be $279,450; on a two-unit house
  will be $357,750; on a three-unit house will be $432,400; and on a four-unit house will be $537,400.



• In Lincoln County, the new FHA mortgage limit on a one-unit house will be $276,000; on a two-unit house will be $353.300; on a three-unit house will be $427,100; and on a four-unit house will be $530,750.

The Housing and Economic Recovery Act pegs the national conforming mortgage loan limit to a house price index chosen by the new Federal Housing Finance Agency (FHFA). For 2009, the national conforming limit will remain at
the current level of $417,000.

The Act says that the new FHA loan limits will be set at 115 percent of the median house price in a given area, as determined by HUD, but can not be lower than 65 percent of the conforming loan limit (the national floor). Also, the FHA mortgage limit cannot exceed 150 percent of the national conforming loan limit (the national ceiling).

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