Barring Congressional action, Federal Housing Administration (FHA) loan limits will revert back to rates determined by the Housing and Economic Recovery Act for single-family housing. This will affect loans insured by the FHA on or after October 1, 2011 and could affect those searching for Atlanta real estate. The U.S. Department of Housing and Urban Development has stated that FHA loan limits would likely decrease in 669 of the 3,334 counties that are currently eligible for FHA insurance. Below is a partial list of the counties in Georgia that would be affected by these cutbacks. The following counties would see FHA limits decrease from $346,250 to $320,850:
- Clayton
- Cobb
- DeKalb
- Douglas
- Fayette
- Forsyth
- Fulton
- Gwinnett
- Paulding
- Walton
Because FHA loan limits restrict the size of mortgages that can be insured by the Federal Housing Administration, decreasing them, may have significant impact on homebuyers. While Congress temporarily increased the limits in 2008, it is now seeking to return those rates to normal levels. Overall, Georgia would experience less than a five percent decline in FHA loan limits. According to data from the U.S. Department of Housing and Urban Development, a total of 10,017 FHA-endorsed loans were issued from January 2011 to April 2011. Of those loans, just 153 (two percent) are above the new proposed limits. States like California, Connecticut and Nevada would face a decline greater than 10 percent.
To read the full document released by the U.S. Department of Housing and Urban Development, click here.
How would a decrease in FHA loan limits affect you? Let us know in the comments.
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