FHA loan limit tops $400,000 in Austin, DFW

 Loan Guidelines, Residential Mortgage  Comments Off on FHA loan limit tops $400,000 in Austin, DFW
Dec 142019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Just before Thanksgiving, we found out the 2020 conforming loan limit increased to $510,400. Late last week, FHA released its 2020 loan limits. By statute, the minimum FHA loan limit is 65% of the conforming limit, or $331,760 for a single-family home.

However, FHA allows higher limits in areas where 115% of the median home price exceeds the minimum. In TX, higher limits apply once again in the Austin, San Antonio, Dallas-Ft. Worth, and Midland metros. Higher limits no longer apply for the Houston metro and Gillespie Co (city of Fredericksburg).

The San Antonio metro took the prize for the greatest increase this year both in dollar amount and percentage rise. The limit rose more than $33,000, or 9.3%, to $393,300.

The Midland area limit also rose significantly, by $23,000 or 7.2%, to $341,550.

The limit in the Austin and DFW metros both rose to $404,800, the highest in the state. The Austin limit was 3.8% higher than last year. The DFW limit was only 2.3% higher.

Remember that these limits apply to all the counties in the metro, not just the cities themselves. Also, these limits apply to single-family homes. Higher limits apply for two- to four-unit properties.

Congress eliminates VA loan limits

 Loan Guidelines, Residential Mortgage  Comments Off on Congress eliminates VA loan limits
Dec 072019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Starting Jan 1st, Veterans and servicemembers who are entitled to VA loan benefits are eligible for 100% financing regardless of the home’s price. The Blue Water Navy Act, passed by Congress earlier this year, has removed the loan limit for a VA loan.

Previously, federal law tied the maximum guaranty amount for a VA loan to the Freddie Mac conforming loan limit. This meant that in 2019 if a veteran wanted to purchase a home priced greater than the loan limit (just north of $484,000), the Veteran was responsible for 25% of the amount above that limit.

With the change, Veterans with full VA loan entitlement now can borrow the full amount of the purchase price without needing to factor a down payment. However, for Veterans with diminished entitlement, either from having an active loan or a default on a previous VA loan, VA still calculates their remaining entitlement based on the Freddie Mac loan limit.

The Act also changes the VA funding fee. Starting Jan 1st, the no down payment Funding Fee will be 2.3% for first-time use for all Veterans, whether Regular Military, National Guard, or Reserves. This is a slight increase for Regular Military, but a decrease for others. For subsequent VA loans, the Funding Fee rises to 3.6% for all. Congress intended the increase to fund other benefits that are part of the Act.

The Act also provides a new Funding Fee exemption for active duty servicemembers who have been awarded a Purple Heart.

A half million dollar home loan with a low down payment

 Loan Guidelines, Residential Mortgage  Comments Off on A half million dollar home loan with a low down payment
Dec 062019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Congress tasked the Federal Housing Finance Agency (FHFA) each year to reset conforming loan limits based on the change in the average U.S. home price for that year. FHFA reported that home prices rose 5.38% last year, so accordingly, it increased the loan limit by the same amount to $510,400 for a single-family home.

A conforming loan is one eligible for purchase by Fannie Mae and Freddie Mac, the two government behemoths that control most of the home loan market. Except for government loan programs, Fannie and Freddie programs offer the best combination of low interest rates and low down payment requirements. For both the minimum down payment is 3%; thus, it’s now possible to purchase a half million dollar home with a $15,000 down payment.

Higher loan limits apply in certain “high cost” areas where 115% of the local median home price exceeds the new limit; however, FHFA hasn’t identified any of those “high cost” areas in TX. Higher limits also apply to two, three, and four unit properties.

Tracking the rising loan limit over the last few years gives a good sense of how quickly home prices have been rising. In 2017 the single-family loan limit first rose from its Congressionally-mandated value of $417,000. In three years, the limit has risen 22%.

The new limits are effective for loans that close starting Jan 1st, which means they will apply for homebuyers who are shopping for a new home now (assuming a normal 30-day closing).

FHA sets its loan limit independently of Fannie and Freddie, and I’ll report on it next week.

Higher FHA and VA loan limits, too

 Loan Guidelines, Residential Mortgage  Comments Off on Higher FHA and VA loan limits, too
Dec 172018
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

We found out a couple weeks ago that the conventional loan limit increased to $484,350. Over the weekend, FHA released its 2019 loan limits. By statute, the minimum FHA loan limit is 65% of the conventional limit, or $314,827 for a single-family home in 2019.

However, FHA allows higher limits in areas where 115% of the median home price exceeds the minimum. In TX, higher limits apply once again in the Austin, San Antonio, Dallas-Ft. Worth, and Houston metros, and for the first time, higher limits also apply in the Midland area and the city of Fredericksburg (Gillespie Co).

Unlike past years, the higher metropolitan area limits did not rise much this year. The DFW limit rose the most, by more than $9000, to $395,600. Austin’s limit rose about $6000 to $389,850. The limit in Houston and San Antonio remained the same at $331,200 and $359,950, respectively. Remember that these limits apply to all the counties in the metro, not just the cities themselves.

Among the new entrants to the higher limit list, Fredericksburg took the prize rising almost $30,000 to $324,300. The Midland area limit, including Midland and Martin Counties, rose $24,000, to $318,550.

The limit for the VA program mirrors the conventional loan limit at $484,350.

USDA programs shouldn’t be affected because loan size is driven by annual income limits, not median home prices.

Finally, these limits apply to single-family homes. Higher limits apply for two- to four-unit properties.

FHA loan limit going up in 2017

 Loan Guidelines, Residential Mortgage  Comments Off on FHA loan limit going up in 2017
Dec 052016
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

FHA also is raising its area loan limits in 2017, primarily affecting the 4 largest metro areas. FHA sets the limit by county and calcuates the limit based on 115% of the county’s or metro area’s median home price.

Median home prices rose in Texas last year, so loan limits rose in the Austin, Dallas/Ft. Worth, San Antonio, and Houston metro areas. Austin’s limit rose almost $30k to $361,100 for a single-family home. The DFW limit rose about the same amount to $362,250, still the highest in the state. San Antonio’s limit rose about $10k to $327,750. Houston, given its flagging market due to the oil industry downturn, rose only slightly to $331,200. Remember that these limits apply to all the metro’s counties, not just the cities themselves. The limit for the rest of the state rose about 2% to $275,650.

These limits apply to FHA case numbers assigned on or after Jan 1st. The case number typically is assigned at the beginning of the mortgage process, so if you need these higher limits, you’ll need to be patient.

Your 2015 loan limits are…

 Loan Guidelines, Residential Mortgage  Comments Off on Your 2015 loan limits are…
Jan 222015
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Every year, Fannie Mae and Freddie Mac release loan limits – the maximum amount you can finance with a conventional loan. FHA does the same for FHA loans. While the conventional loan limit didn’t change – $417,000 for a single-family home – FHA limits did change, mostly for the better.

In 3 of the 4 major TX metros, the loan limit increased by an average 9%. FHA sets an area’s loan limit based on 115% of the area’s median home price with a minimum loan limit of $271,050.

Austin’s limit rose by more than $25k to $331,200. Houston’s limit rose by $31k to $326,600, and the Dallas/Ft. Worth limit rose by $23k to $310,500. San Antonio’s loan limit remained $316,250. Remember that these limits apply to the entire metro area around these cities.

Click here for a link to the 2015 FHA loan limits.