If your Spring Texas home is on the market for between $270,432 and $206,350, you need to say “Thank You” to the FHA. Because yesterday, they just made it possible for more buyers to qualify to purchase your home.
As the requirements for subprime loans have become stricter and 100% financing loans are being eliminated, the popularity of Federal Housing Administration (FHA) loans has been increasing. FHA loans require only a 3% minimum down payment, FICO scores do not apply, they have higher allowable debt ratios than the debt ratios imposed on conventional loans, and the interest rates are competitive with conventional loans. All good reasons that make a FHA loan a great choice for the first-time home buyer with little money saved and less than stellar credit.
Yesterday’s increase in the loan limit from $200,160 to $271,050 is bound to further increase the popularity of FHA loans. But this source of newly qualified buyers may just disappear as soon as they appeared if Congress does not approve legislation making the new loan limit increase permanent. Otherwise, the loan limits will expire at the end of 2008.
So don’t be surprised Spring Texas home sellers if the buyer of your home is getting an FHA instead of a conventional loan. Instead say “Thank You” to the FHA.