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November 19, 2011

Conforming & FHA Loan Limits 2011 – 2012 (CRITICAL UPDATE 11/18/2011)

November 19, 2011

Conforming & FHA Loan Limits 2011 – 2012 (CRITICAL UPDATE 11/18/2011)

FHA loan limits are $729,750 now through 2013, but non-FHA Conforming loan limits will remain at the $625,500 level established October 1, 2011. The FHA limit increase came after a spending bill passed the House (298, 121) and Senate (70, 30) Thursday, then President Obama signed it into law Friday, November 18. Below are FHA and Conforming loan limits as of now on 1-4 unit properties, plus rate spreads between loan tiers:

CONFORMING LOAN LIMITS
Tier 1-TRUE CONFORMING: Lowest rates for loans to these limits:
-$417,000 (1 unit)
-$533,850 (2 units)
-$645,300 (3 units)
-$801,950 (4 units)

Tier 2-HIGH-BALANCE CONFORMING: Rates .125% to .375% higher than Tier 1 for loans to these limits:
-$625,500 (1 unit)
-$800,775 (2 units)
-$967,950 (3 units)
-$1,202,925 (4 units)
-High-Balance limits vary by county: find yours here

Tier 3-JUMBO: Rates .25% to .625% higher than Tier 2 for loans to $2m.

FHA LOAN LIMITS
Tier 1-TRUE FHA: Lowest rates for loans to these limits:
-$417,000 (1 unit)
-$533,850 (2 units)
-$645,300 (3 units)
-$801,950 (4 units)

Tier 2-HIGH-BALANCE FHA: Rates .125% higher than Tier 1 for loans to these limits:
-$729,750 (1 unit)
-$934,200 (2 units)
-$1,129,250 (3 units)
-$1,403,400 (4 units)
-High-Balance limits vary by county: find yours here, but note this page probably won’t be updated until November 21, 2011 (still had old limits as of November 19).

As for Friday’s broad spending bill, here’s the excerpt that increased FHA loan limits:

Sec. 238. Notwithstanding any other provision of law, for mortgages for which a Federal Housing Administration case number has been assigned during the period beginning on the date of enactment of this Act and ending on December 31, 2013, the dollar amount limitation on the principal obligation for purposes of section 203 of the National Housing Act (12 U.S.C. 1709) shall be considered to be, except for purposes of section 255(g) of such Act (12 U.S.C. 1715z-20(g)), the greater of–

(1) the dollar amount limitation on the principal obligation of a mortgage determined under section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)); or

(2) the dollar amount limitation that was prescribed for such size residence for such area for 2008 pursuant to section 202 of the Economic Stimulus Act of 2008 (Public Law 110-185; 122 Stat. 620).

No wonder this is confusing to consumers. The full bill is 159 pages, and the tiny excerpt above on FHA loan limits is as clear as mud because, instead of explicitly stating loan limits, it references two other bills that made the higher loan limits law previously.

This post (and future posts) with explicit loan limits for 1-4 unit properties should clear things up.

The debate will continue as politicians and lobbyists try to raise Conforming to match the new higher FHA limits.

Stay tuned, but go by these limits until then.

See WeeklyBasis for rates in all tiers and commentary in plain English, and follow daily on Twitter and Facebook.