loanOver the Thanksgiving holiday weekend, Congress passed new legislation raising the maximum limits for Federal Housing Administration loans while keeping Fannie Mae and Freddie Mac loan limits at the same levels. The compromise between Republican and Democratic lawmakers is a move to provide more “oomph” for the housing industry.

The maximum FHA loan amounts across the country are now 125 percent of the local median home sale price. Fannie Mae and Freddie Mac loan limits remain at 115 percent of the local median home sale price.

The FHA can now provide loans up to $729,750 in certain high-cost areas around the country with down payments as low as 3.5 percent. For the same high-cost areas, Freddie Mac and Fannie Mae loan limits remain at $625,500.

The new loan limits are having the same effect on moderate-cost and low-cost areas. These increased limits may make the Federal Housing Authority the preferred financing options for those seeking larger loans with lower down payments. The new terms are set to last through the end of 2013.

Although many home buyers may now find FHA loans more suitable, they also carry higher closing costs and insurance premiums, so all buyers need to carefully evaluate their situations with a loan officer.

If you are looking to take advantage of better loan options and buy a home in Denver, call me at 888-860-1931. I can arrange a meeting with a proven local loan officer to help you understand your new loan options.