The Dept. of Housing and Urban Development (HUD) announced that the temporary loan limits it established as part of the Housing and Economic Recovery Act of 2008 will expire Dec. 31, 2013. The loan limits for high-cost areas, which were temporarily raised to $729,750, will be reduced to the FHA permanent limit of $625.500 beginning Jan. 1, 2014.
Despite C.A.R.’s and NAR’s aggressive lobbying efforts to make the increase permanent, Congress failed to extend the temporary loan limits. However, as a result of the lobbying C.A.R. and NAR did in 2008, the FHA loan limits were permanently raised from $362,790 to $625,500.
Borrowers with existing FHA-insured mortgages may continue to utilize FHA’s Streamline refinance program regardless of their loan balance. The changes are effective for case number assignments between January 1, 2014, and December 31, 2014.
The mortgage loan limits for FHA-insured reverse mortgages will remain unchanged. The FHA reverse-mortgage product, known as the Home Equity Conversion Mortgage (HECM), will continue to have a maximum claim amount of $625,500, with actual loan limits based on property value, borrower age, and current interest rates.