Yesterday we were notified of the new FHA Loan Limits for Connecticut that are a result of the Stimulus Bill. These new TEMPORARY limit increases were announced per County not only in Connecticut but throughout the Country.
Two things need to be stressed however: 1) These new limits are only TEMPORARY until 12/31/08, and there is no guarantee that they will be extended beyond that date. 2) Many if not most Lender will not be accepting applications with the higher limits (above $417,000) right away, because their investors have not yet agreed to the higher limits.
While I have not received a new product description from my company yet, first indications are that along with the increased loan sizes, new underwriting criteria will be established for these “jumbo-conforming” loan sizes which consist of Manual underwrite. For example: 1 unit, Max LTV 90%, reserve requirements, FICO requirements (700 >80% LTV, 660 <80%), max 45% DTI ratio, purchase & rate/term ONLY. No cash out refinances. Hopefully I will a more in-depth explanation of this by the beginning of next week.
For those of you who are curious as to how Fannie established these new loan limits, they took 125% of the HUD median sales price per county. So for instance, in New London County in Connecticut, HUD established the median sales price at 319,000. 125% of $319,000 = $398,750. However, in the case of New London County this new loan limit is lower than the current limit of $417,000, so $417,000 remains as the New London County Maximum Mortgage Amount.
Hope this helps, and for those of you who are ready this and are not in Connecticut, I would recommend that you contact the Lender that you refer your Buyers too, and ask them to provide you with the new limits in your area.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
