FHA Mortgages, Lending Guidelines, Mortgage Guidelines

FHA, VA and USDA Make Changes to Support Homeownership

October 1, 2011 by · 4 Comments 

Dandelion by Sunnybeach | iStockphoto.comThe winds of change in residential financing has taken full force effective today. Every year just like the change in weather, the new fiscal year begins on October 1st for the US Department of Housing and Urban Development (FHA), Department of Veterans Affairs (VA) and USDA Guaranteed Rural Housing Loan Program (USDA).

With a new year of funding, changes for FHA, VA and USDA are mandatory in order to sustain their individual and collective role in the US housing industry.

Let’s get started with the major changes for each organization. When we talk about the biggest advocate in the housing industry, FHA is always top of mind awareness. Although FHA implements guideline changes throughout the year October 1st rolls out changes to the FHA Mortgage Limits for both forward and reverse mortgages.

For the past several years, FHA Mortgage Limits had been raised to help the housing market. This year the maximum FHA Mortgage Limit for the greater Joliet-Naperville-Gary Metropolitan Statistical Area (aka Chicago land) is being reduced from $410,000 down to $365,700 for a single-family home on a forward mortgage. The maximum principal FHA Mortgage Limit for a Home Equity Conversion Mortgage (aka. reverse mortgage) is $625,500.

With the reduction in the FHA Mortgage Limit, this will be good news for the FHA Insurance fund as they will have less exposure to large losses from higher priced homes and strategic defaults.

The US Department of Veterans Affairs (VA) will also be making changes that benefit both 1st time home buyers and repeat users of VA Guaranteed home loans. Across the board, VA has reduced their upfront loan fee for VA Guaranteed Loans on a graduated scale from today until 2013. These reduced fees will benefit both veterans and reservists/national guardsman alike.

Similar to VA, the USDA Guaranteed Rural Housing Loan Program has also reduced their upfront Guarantee fee from 3.50% down to 2.00% for purchase transactions. Unlike VA though, USDA will now be requiring an annual fee (aka mortgage insurance) of 0.30% on the outstanding principal balance.

While some would applaud these changes, others will voice their opposition. Either way, if you would like to learn more about the changes that FHA, VA and USDA have made to support homeownership just speak to a qualified mortgage professional on the team at GVC Mortgage, Inc.

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!


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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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4 Responses to “FHA, VA and USDA Make Changes to Support Homeownership”
  1. Cathy Mattan says:

    Thank you for this updated information, it will help me when trying to serve my clients who are trying to deceide which type of loan is best for them.

  2. Thank you, James for the up to date information that you are always willing to give. I am thankful that I have a highly educated mortgage professional that I can send my clients to. You always give them solid advice and help them figure out the loan product that would work best for them.

  3. Cathy – FHA, VA and USDA home loans are still some of the most beneficial to home buyers and homeowners who don’t fit the high standards of big box banks. Just let my team know when and how they can be of service to you and your clients.

  4. Carrie – As you know, my team and I are just thankful to be part of your team. Collectively we can keep homeownership alive with FHA, VA and USDA home loans.

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