(804) 771-2100 ext. 3743
August 26, 2003
HUD INCREASES MORTGAGE LIMITS 18 PERCENT IN SEVEN VIRGINIA COUNTIES
FHA-Insured Homebuyers in Amelia, Caroline, Cumberland, King &
Queen, King William, Louisa and Sussex Counties Will Have More Homes
to Choose From
RICHMOND - The U.S. Department of Housing and Urban Development
has increased the maximum mortgage that
can be insured by its Federal Housing Administration (FHA) in Amelia, Caroline, Cumberland, King and Queen, King William, Louisa and Sussex counties by 18 percent, effective immediately.
The increase results from a June decision by the U.S. Office of
Management and Budget to include the seven
counties as part of the Richmond Metropolitan Statistical Area (MSA) which, based on actual home sales data, is considered to be a "high housing cost" MSA. All the component parts of an MSA share the same FHA mortgage insurance limits.
As a result of their inclusion in the Richmond MSA, the FHA mortgage
insurance limit for a one-unit home in the
seven counties has been increased from $154,896 to $183,317; the limit on a two-family home has been increased from $198,288 to $206,478; and the limit on a three-unit home increased from $239,664 to $250,855. The FHA limit
on a four-family home remains unchanged at $297,840.
"This is a win-win for these counties," said HUD Richmond Field
Office Director Mary Ann Wilson. "Higher FHA
mortgage limits give homebuyers more houses and communities from which to choose while affording realtors a
larger inventory to sell."
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.
Over the last 10 years, FHA has insured almost 3,800 mortgages
with a total dollar value of more than $300 million
in the seven counties. Sixty percent of the mortgages insured went to first-time homebuyers.
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 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
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 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 federal housing agency committed to increasing
homeownership, particularly among minorities, creating affordable
housing opportunities for low-income Americans, supporting the homeless,
elderly and people
with disabilities and people with AIDS. The Department also promotes economic and community development as well as enforces the nations fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.
Editors Note - In addition to the seven counties listed above that recently have been added to the Richmond MSA, the Richmond MSA previously had included the cities of Colonial Heights, Hopewell, Petersburg and Richmond and Charles City, Chesterfield, Dinwiddie, Goochland, Hanover, Henrico, New Kent, Powhatan and Prince George counties.