Sunday, March 9, 2008

New Federal Housing Loan Limits Could Benefit 250,000, HUD Says

By Neil Roland

March 6 (Bloomberg) -- About 250,000 Americans in dozens of states, including Texas, New York and Florida, may benefit from higher limits on new loans backed by the Federal Housing Administration, a Department of Housing and Urban Development spokeswoman said today

Another 30,000 Californians could qualify for the new limits, HUD Secretary Alphonso Jackson said earlier this week. The higher loan limits, raised to as much as $729,750 from the current cap of $362,790, will start today and remain in effect until Dec. 31, HUD spokeswoman DJ Nordquist said in an interview.

``Families in high-cost states have been priced out of FHA- backed loans,'' Jackson said in a statement released by the agency.

The increase in limits was provided in a $168 billion economic stimulus package passed by Congress and signed by President George W. Bush last month. They will affect homebuyers and homeowners trying to convert from subprime mortgages into FHA- insured loans, Nordquist said.

The new loan limits will range from $271,050 to $729,750. The maximum limit will apply to 75 high-cost metropolitan areas such as New York, Washington, D.C. and Los Angeles, the statement said. Cities with more moderate housing prices such as Dallas, Houston, and Tallahassee, Florida will have lower loan limits.

The loan limits will return to their current levels in January, the statement said.

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