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Can someone explain the FHA loan limits to me

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CreditGuy03
Established Contributor

Can someone explain the FHA loan limits to me

I live in Galveston county texas. The limit for FHA seems to be quite low at 295,550 for a one family home.

 

If I wanted to buy a home that costs 400k could I not use FHA?

 

What are the FHA jumbo loans for?

Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
Message 1 of 9
8 REPLIES 8
dreamer2014
Regular Contributor

Re: Can someone explain the FHA loan limits to me

Now there's an interesting question...I hope you get it answered because I would like to know myself. 

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Message 2 of 9
StartingOver10
Moderator Emerita

Re: Can someone explain the FHA loan limits to me

Here is a direct quote from HUD regarding the calculation of loan limits along with the link

 

"Welcome to the FHA Mortgage Limits page. This page allows you to look up the FHA or GSE mortgage limits for one or more areas, and list them by state, county, or Metropolitan Statistical Area. The results page will also include a Median Sale Price value for each jurisdiction. Those are the median price estimates used for loan limit determination. They are for the high-price county within each defined metropolitan area, and for the high-price year starting with 2008 and ending in the year just prior to the effective year of the loan limits. These median prices only directly determine the actual (1-unit) loan limits when the calculated limit (115% of the median price) is between the national ceiling and floor values for the loan limits. Limits for multiple-unit properties are fixed multiples of the 1-unit limits. The full set of county-level median price estimates for the year just prior to the loan-limits year are available in the downloadable mortgage limits dataset accessible via the link found at the bottom of this page"

 

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

 

As you can see it is based on median price estimates (115%). Your area doesn't require jumbo sized mortgages and neither does my area Smiley Happy There are markets that need the jumbo FHA limits because they are high priced markets. The link I included above is a search feature for any market or you can download all the markets at the bottom of the same page.

 

You can use FHA financing anyway, but you wouldn't want to because you have to pay the difference in cash from the loan limit to the purchase price. It is better to go with conventional if you are putting down $100k on a $400k purchase. Or purchase within the loan limits.

 

Have you considered a 5% down payment conventional loan instead? MI is much, much less with a conventional loan.

 

Message 3 of 9
CreditGuy03
Established Contributor

Re: Can someone explain the FHA loan limits to me

Wow so my hopes are dashed. The only way for me in my situation is to do conventional 20%. I had a short sale so I am not eligible for 5% until another 5 1/2 years

Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
Message 4 of 9
StartingOver10
Moderator Emerita

Re: Can someone explain the FHA loan limits to me

When was your short sale?

 

You can do a conventional loan after a short sale 2 years from the date the deed transferred to the buyer with 20% down.

 

Or 4 years if you put down 10% on a conventional loan.

Message 5 of 9
CreditGuy03
Established Contributor

Re: Can someone explain the FHA loan limits to me

It was january 2011. I was hoping to do FHA in Jan 2015 so I was saving for the 3.5% for a 400k house in a great school district however that FHA guidline just killed it. No way do I have 80k for a conventional downpayment

Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
Message 6 of 9
StartingOver10
Moderator Emerita

Re: Can someone explain the FHA loan limits to me


@CreditGuy03 wrote:

It was january 2011. I was hoping to do FHA in Jan 2015 so I was saving for the 3.5% for a 400k house in a great school district however that FHA guidline just killed it. No way do I have 80k for a conventional downpayment


You wouldn't need $80k for a $400k purchase - only $40k plus cc.

 

Jan 2015 will be 4 years for you.

Message 7 of 9
DallasLoanGuy
Super Contributor

Re: Can someone explain the FHA loan limits to me


@CreditGuy03 wrote:

I live in Galveston county texas. The limit for FHA seems to be quite low at 295,550 for a one family home.

 

If I wanted to buy a home that costs 400k could I not use FHA?   you would have to put down the difference in cash

 

What are the FHA jumbo loans for?   for markets that have higher median home prices.... Texas has low median prices


 

Retired Lender
Message 8 of 9
tooleman694
Valued Contributor

Re: Can someone explain the FHA loan limits to me

We ran into this same problem, FHA in Texas and our home was way over the limits.

 

I could not go conventional, so we had to bring a ton of cash to the table.

Message 9 of 9
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