from Florida Realtor Magazine, July/August 2008 | page 26

FHA Increases: For a Limited Time Only

Keep in mind that the increase in FHA loan limits is scheduled to last only through 2008. After that, it’s anybody’s guess as to whether the increase will be extended.

“If the new FHA limits are very successful and help turn the housing market around, it would be a wise decision to extend them for at least another six months,” says Terry Dona, sales manager at Metro Mortgage and Gulf Coast Associates in
Bonita Springs, who’s also a mortgage underwriter and Department of Housing and Urban Development lender.

On the other hand, if a large number of loans insured under the new limits default, HUD may be reluctant to extend the program. “If HUD finds these new loans aren’t performing or are performing below where they should, HUD would have to treat this like a business, and I could see justification to lower the loan amounts again,” says Dona. “But sometimes when the cat’s out of the bag, it’s hard to put it back in. I think there’s a good chance we’ll keep these limits because they’ll bring housing back.”

Given the uncertainty, Glenn Stein, broker/owner of Realty Executives Ocala in Ocala, offers sage advice: “Now’s the time to use the new FHA limits since they may not be extended beyond 2008.”