(804) 771-2100 ext. 3743
August 30, 2004
HUD OKAYS 12.5 PERCENT INCREASE IN FHA MORTGAGE LIMIT IN
RICHMOND METROPOLITAN AREA
Increase Gives Homebuyers More Choices in Richmond & Surrounding
RICHMOND - The U.S. Department of Housing and Urban Development's Richmond Field Office has announced that
the Federal Housing Administration, a part of HUD, has increased its single-family mortgage insurance limit by 12.5 percent in the Richmond-Petersburg metropolitan area, effective immediately.
HUD's action was based on recent home sales data from the Central Virginia Regional Multiple Listing Service and a request for a mid-year adjustment that were submitted by the Richmond Association of REALTORS in August.
FHA now will insure mortgages on a one-family home of up to $213,750 in the Richmond area, up from $189,953.
The FHA mortgage limit for two-family homes has been raised from $213,947 to $240,750; on three-family homes
from $259,935 to $292,500; and on four-family homes from $337,500 to $397,992.
The new FHA mortgage insurance limits will be in effect in the cities of Richmond, Colonial Heights, Hopewell and Petersburg and Amelia, Caroline, Charles City, Chesterfield, Cumberland, Dinwiddie, Goochland, Hanover, Henrico,
King and Queen, King William, Louisa, New Kent, Powhatan, Prince George and Sussex counties.
"FHA mortgage insurance plays a crucial role in enabling thousands of Virginia families to buy a home and, with it, a piece of the American Dream," said Richmond Field Office Director Mary Ann Wilson. "By making sure that our FHA limits remain sensitive to market dynamics in the greater Richmond area, we are broadening the market and
expanding the choices that FHA-insured homebuyers have. We thank the Richmond Association of REALTORS for providing timely data that has allowed us to respond in a timely fashion to changes in the Richmond area's strong housing market."
Over the last 10 years, FHA has insured more than 74,000 mortgages in the Richmond-Petersburg metropolitan area with a total dollar value of $6.8 billion. During the period, the average value of an FHA insured mortgage has risen
55.6 percent to $116,107.
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 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 in mortgage limits combined with benefits such as the reduction in FHA mortgage premiums announced two years ago makes FHA an even more attractive home mortgage product. 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 as
enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet