New FHA Loan Limits

New limits for FHA loans are going into effect January 1st of 2009. The new limits are higher than the old base limits but, in most cases, lower than the temporary limits put in place during 2008. We can still use the old temporary limits as long as we have a loan approval, purchase contract, and FHA case number in place before the end of the year.

The new loan limits for counties in Southern Oregon are as follows:

Josephine: $271,050
Jackson: $279,450
Douglas: $271,050
Klamath: $271,050

For Douglas and Klamath Counties the limits are unchanged. The temporary loan limit in Josephine County is $325,000 and in Jackson County it is $422,500 through the end of 2008.

In the current mortgage market, FHA has emerged as one of the most aggressive loan programs available. Buyers with less than perfect credit can buy a home with a 3% down payment, and even that 3% can be a gift. FHA is also a good option for refinances as the loan to value ratios are very flexible and you can even refinance a house that has been recently listed for sale. The property requirements have been relaxed recently and sellers are no longer required to pay any buyer's closing costs. Throw in fixed rates that often beat conforming - especially at higher loan-to-value ratios - and you can see why FHA is more important than ever.