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January 8, 2007
HUD OKAYS 16.2 PERCENT INCREASE IN FHA MORTGAGE LIMITS IN CHARLOTTESVILLE METRO AREA
RICHMOND - The U.S. Department of Housing and Urban Development has approved a 16.2 percent increase in the maximum mortgage that can be insured by the Federal Housing Administration (FHA), a part of HUD, in the Charlottesville metropolitan area.
As a result of HUD's decision, in calendar year 2007 the FHA mortgage insurance limit on one-family houses will rise 16.2 percent from $261,250 to $303,525; on two-family houses from $294,250 to $341,865; on three-family houses from $357,500 to $415,350; and on four-family houses from $412,500 to $479,250.
The increase is effective for mortgages endorsed on or after New Year's Day, 2007. For FHA purposes, the Charlottesville metropolitan area includes the City of Charlottesville and Albemarle, Fluvanna, Greene and Nelson counties.
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.
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.
Like the Richmond-Petersburg, Hampton Roads, Winchester and northern Virginia metropolitan areas, FHA considers the Charlottesville area a "high cost" 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, 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 programs is available at www.hud.gov