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RICHMOND - The U.S. Department of Housing and Urban Development has raised the maximum mortgage its Federal Housing Administration (FHA) will insure across most of the Commonwealth of Virginia, effective for mortgages endorsed on or after New Year's Day, 2006.

In most communities of Virginia, during calendar year 2006, FHA will insure mortgages on a one-family house of up
to $200,160, up 15.9 percent from $172,632 in 2005. The FHA mortgage limit for two-family houses will increase to $256,248 in 2006, up from $220,992; on three-family houses to $309,744 in 2006, up from $267,120; and on four-family houses to $384,936 in 2006, up $331,968 in 2005.

The 15.9 percent increase in FHA mortgage insurance limits includes most rural areas of the state as well as the
cities of Abingdon, Blacksburg, Bristol, Christiansburg, Danville, Emporia, Farmville, Grundy, Harrisonburg, Lexington, Norton, Lynchburg, Martinsville, Pearisburg, Pulaski, Radford, Roanoke, South Boston, Staunton and Waynesboro.

In "high cost" housing markets where real estate prices have been rising rapidly, FHA has also established new,
higher mortgage insurance limits.

In the Richmond-Petersburg metropolitan area, for example, in calendar year 2006 the FHA mortgage insurance limit on one-family homes will rise 10.9 percent to $237,025; the FHA limit on two-family homes will rise to $266,965; the FHA limit on three-family houses will rise to $324,350; and the FHA limit on four-family houses will rise to $384,936.

The Richmond-Petersburg area includes 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, Prince George and Sussex counties.

In the Charlottesville metropolitan area, in calendar year 2006 the FHA mortgage insurance limit on one-family houses will rise 23.4 percent to $261,250; the FHA limit on two-family houses will rise to $294,250; the FHA limit on three-family houses will rise to $357,500; and the FHA limit on four-family houses will rise from $412,500.

The Charlottesville area includes the City of Charlottesville and Albemarle, Fluvanna, Greene and Nelson counties.

In the Winchester metropolitan area, in calendar year 2006 the FHA mortgage insurance limit on one-family
homes will rise 6.7 percent from $237,500 to $253,320; the FHA limit on two-family homes will rise from $267,500
to $285,318; the FHA limit on three-family homes will rise from $325,000 to $346,648; and the FHA limit on four-
family homes will rise from $375,000 to $399,978. .

The Winchester area includes the City of Winchester and Frederick County in Virginia and Hampshire County, West Virginia.

In the Fredericksburg-Northern Virginia area, in calendar year 2006 the FHA mortgage insurance limit on one-family houses will rise 15.9 percent to $362,790; the FHA limit on two-family houses will rise to $464,449; the FHA limit on three-family houses will rise to $561,411; and the FHA limit on four-family houses will rise to $675,000.

The Fredericksburg-Northern Virginia area includes the cities of Fredericksburg, Manassas and Arlington, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania and Stafford counties.

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 insurance.

The higher limits apply to FHA's acquisition, acquisition & rehabilitation, energy-efficient, condominium, disaster and home equity conversion mortgage insurance products.

The new FHA limits cover most urban and rural areas of Virginia. The FHA limit also was increased 15.9 percent, for example, in Roanoke, Lynchburg, Martinsville, Harrisonburg, Lexington, Emporia, South Boston, Radford, Bristol,
Pulaski, Blacksburg, Farmville and Danville.

In "high-cost" markets such as the Richmond/Petersburg, Charlottesville/Albemarle or Hampton Roads and northern Virginia higher limits FHA mortgage limits apply.

FHA-insured loans are attractive to low-income and first time homebuyers because they require only a three
percent downpayment and permits family and friends to contribute to the initial home buying expenses. FHA also
has more relaxed credit standards and permits borrowers to carry more debt than private mortgage insurers
typically allow.

The new loan limits are part of an annual adjustment HUD makes to account for rising home prices. Under federal
law, loan limits are tied to the conforming loan limits of Freddie Mac and Fannie Mae, federally chartered
corporations that buy and package mortgages.

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 and people with disabilities and people living 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.

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