2019 Lending: FHA Loan Limit Increase
In Real Estate, sometimes with the New Year comes new changes that we want to make sure to keep our clients in the loop about. When looking at the changes on the lending side, we asked one of our preferred lenders, Stephanie Hecke with Landmark Bank (NMLS # 1539979), to tell us more about changes with the FHA loan limit increase for 2019;
FHA mortgages have been a popular option for many Americans for a long time. The New Year brought on higher loan limits, raising the cap to $314,827 for FHA loans. Additionally, in high cost areas the ceiling can be as high as $726,525. For Collin County specifically, it rose to $395,600. That is a very important move for our area since the median home price is at $306,900. This could open up many options for first time homebuyers or buyers with a small amount of cash to put down on a home that they might not have had before.
There may also be positive advancements as banks adjust to changes in the recent past. FHA has always had their own requirements, but banks will also have their own requirements. Typically, the bank is going to have more strict guidelines than FHA to help insure they are avoiding the fines incurred when a mistake occurs on a loan. FHA announced that it will no longer penalize lenders when loans go through with minor mistakes that had no bearing on the loan approval. It is my assumption that banks did not instantly change their requirements to closer align with FHAs to take advantage of this, but as those changes start to occur it can mean an approval that was a denial before.
It will be interesting to see how the loan product continues to evolve now that FHA has serious competition. Fannie and Freddie have both come out with 3% down first time homebuyer products that can sometimes be a better option for buyers than FHA. In those programs, they are not required to keep PMI for the life of the loan and they do not incur the 2.25% funding fee that FHA does. Not to mention that 3% down, versus 3.5% down can make a huge difference to some buyers.
Looks like NOW is a great time to buy a home! Special thanks to Stephanie Hecke, (NMLS # 1539979) Real Estate Lending Representative with Landmark Bank for the info above. For more lending questions and to get pre-approved for your home loan, give Stephanie a call at 800-618-5503 x 3229. To get started on finding a new home, give the Marr Team a call at 214-620-0411. Together, we are ready to help you with your move in 2019!