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HIGHER HUD LOAN LIMITS ANNOUNCED
| The U.S. Dept. of Housing and Urban Development (HUD) announced yesterday that the Federal Housing Administration (FHA) has increased its single-family home mortgage limits by more than 3 percent. Effective Jan. 1, 2004, FHA will insure single-family home mortgages up to $160,176 in low-cost areas and up to $290,319 in high-cost areas. The loan limits for two-, three- and four-unit dwellings also increased. Low-income and first-time homebuyers are attracted to FHA-insured loans because the agency requires only a 3 percent down payment. The new loan limits are part of an annual adjustment HUD makes to account for rising home prices. Under federal law, loan limits are tied to the conforming loan limits of Freddie Mac and Fannie Mae, federally chartered corporations that buy and package mortgages. The increases also will benefit senior citizens who qualify for FHA-insured reverse mortgages. Reverse mortgages allow homeowners aged 62 years and older to borrow against the value of their homes without selling them. Homeowners can select a lump-sum payment, monthly payments, or tap into a line of credit. No repayment is required as long as a homeowner lives in a home with a reverse mortgage. The reverse mortgage is repaid, with interest, when a homeowner sells the home or dies. |