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March 21, 2006
HUD OKAYS 9.6 PERCENT HIKE IN FHA MORTGAGES IN HAMPTON ROADS METRO
RICHMOND - The U.S. Department of Housing and Urban Development has approved a 9.6 percent increase in the maximum mortgage that can be insured by the Federal Housing Administration (FHA), a part of HUD, in the Hampton Roads metropolitan area. The increase is effective for mortgages endorsed on or after March 20, 2006.
There currently are more than 37,500 active FHA-insured mortgages with at total value of $3.4 billion in the
Hampton Roads area that includes Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg and Isle of Wight, Gloucester, James City, Mathews, Surry and York counties in Virginia
as well as Currituck County in North Carolina.
HUD's decision to increase FHA mortgage insurance limits in the Richmond metropolitan area was based on recent sales data submitted by the Williamsburg Area Association of REALTORS. HUD last increased FHA mortgage
insurance limits in the Hampton Roads area in November 2004.
As a result of HUD's decision, the FHA mortgage insurance limit on one-family homes will rise 9.6 percent to
$313,500; the FHA limit on two-family homes will rise to $353,100; the FHA limit on three-family houses will rise to $429,000; and the FHA limit on four-family houses will rise to $495,000.
"FHA mortgages have always been attractive and affordable, particularly to first-time buyers," said HUD Richmond Field Office Director Bill Miles. "We appreciate the efforts by the Williamsburg Area Association of Lenders to make
FHA even more attractive to buyers and even more competitive in the Hampton Roads metro market."
"We as REALTORS are very pleased to be able to help people achieve the American dream of homeownership," said Angela Dougherty, 2006 President, Williamsburg Area Association of REALTORS. "We are continually striving to
promote housing affordability and we are happy to have been of assistance in having the limits increased."
FHA insured mortgages are especially attractive to first-time homebuyers because of down payment requirements
that are lower and easier to assemble than most conventional mortgage products. FHA also has more relaxed credit standards and permits borrowers to carry more debt than private mortgage insurers typically allow and FHA lenders must provide loss mitigation assistance to borrowers who experience financial difficulties.
The higher FHA limits apply to FHA purchase mortgages, acquisition and rehabilitation mortgages, energy efficient mortgages, disaster recovery mortgages and home equity conversion or "reverse" mortgages.
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.
Like the Richmond-Petersburg, Charlottesville, Winchester and northern Virginia metropolitan areas, FHA considers
the Hampton Roads area to be a "high cost" housing market with FHA loan limits considerably higher than in smaller communities in the rest of the Commonwealth.
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 espanol.hud.gov.