Some Texas Counties Benefit from FHA Loan Limit Increases
HUD just announced FHA loan limit increases in our area of Texas.
FHA home loan programs typically help first-time homebuyers, seniors or others with limits on what they can afford. FHA home loans offer:
- A low 3.5% down payment
- Flexible income and credit requirements
- Low closing costs
So what is an FHA loan limit? Some FHA home loans have a loan value cap based on location, but keep in mind that the typical FHA candidate already has financial limits. That makes this less of an issue. The program has no minimum credit score, although the lender might, and the chances of approval get better as the scores get higher.
The areas that will receive the FHA loan limit increase include: Travis, Williamson, Bastrop, Hays and Caldwell counties. Other areas of Texas have increased too including DFW and Houston. Bexar & Guadalupe counties’ FHA loan limit remain unchanged. The FHA loan limit ceilings are as follows: $331,200 for single family and $424000 for duplexes.
When will this FHA loan limit go in to effect? On December 9, 2015, FHA issued Mortgagee Letter 15-30 (PDF 90KB), effective for forward mortgage case numbers assigned on or after January 1, 2016.
If you have questions about the loan limits for other areas, you can visit the web FHA website to search other areas at: FHA Mortgage Limits .
FHA Loans come in many varieties to fit different buyers’s needs:
FHA Fixed Rate Loans offer two types of fixed FHA mortgage rates (offer the same rate throughout the life of the loan):
- 30-year fixed rate FHA
- 15-year fixed rate FHA
Both options offer the same interest rate stability, but the 15-year term has higher monthly payments, giving you a faster way to build up home equity. You can use this higher equity as a down payment when you move to your next house.
FHA Adjustable-Rate Mortgages offer the 15-year alternative and gives a buyer greater power to move. With a higher monthly payment, you build up more equity in the house sooner. This means you can use proceeds from a house sale to make a bigger down payment on a future purchase.
An FHA adjustable rate mortgage (ARM) lets homeowners pay a low introductory interest rate for the first few years, then move to a new home before it adjusts, possibly upwards. If you know this is a starter home that you will leave in a few short years, then an ARM could make sense for you. PrimeLending offers the 5-year hybrid ARM (fixed for the first 5 years, change annually after that, annual cap of 2 percentage point and a lifetime cap of 6 percentage points.)
Let me know if I can assist any of your buyers with FHA (or any other) loans or if you have any questions regarding FHA Mortgage Limits, contact me now.