Federal Housing Authority Loan Limitations

Federal Housing Authority loan Limitations are a vital part of the mortgage process. Federal Housing Authority loan Limits are there to create a safety net for the lender and the borrower during the investment process. Before you start the process for a Federal Housing Authority loan there are some important factors to know regarding FHA loan Limits.

The first important factor of Federal Housing Authority loan Limitations is the location of the house you are trying to purchase. The reason is that housing prices are varied across the states. For example, in the bay area of San Francisco, the Federal Housing Authority loan limit is $729,750. While in the Houston / Galveston area in Texas, the FHA loan limit is $271,050. Houston's FHA loan limit is only 37% of the total in the San Francisco area! The government takes into account the normal housing costs for each location and will set the values down to the country level to give the most precise Limits.

It is important to have a steady job when preparing for a loan, being able to show that the borrower can fulfill all of their loan payments will influence the final Federal Housing Authority loan limit. Also, the borrower must not have overwhelming debt or they can be denied the loan. The buyer must also be able to pay the 3% down payment on their desired home before applying for a Federal Housing Authority loan. This helps make the process as smooth as possible for all parties involved.

It is possible to have troubled credit and still get a Federal Housing Authority loan. The Federal Housing Authority will allow a blood relative of the borrower, such as a parent, to co-sign for the loan. This feature is called Non-Owner-Occupied Co-Borrower, as the relative who co-signed does not need to live with the homebuyer afterward. Also, depending upon the state, the customer may receive a discount on their state Transfer Taxes at settlement will not affect the FHA loan limit. here are the Federal Housing Authority loan Limits by state.

Federal Housing Authority loan Limits are put in place, above all, for protection. These protections allow the lender to know what the borrower financially needs to make a wise investment and helps the borrower remain 'afloat' by making sure they are not putting themselves in a position which will overwhelm them. This is one reason that Federal Housing Authority loan Limitations vary by state, to find the limit here are the FHA loan Limitations by state and county.

https://entp.hud.gov/idapp/html/hicostlook.cfm