FHA Announces 2009 Loan Limits for Orange County, CA
As expected, the new 2009 FHA loan limit for Orange County, CA will be $625,500. This new limit is effective for new loans with credit approval on or after January 1, 2009. This is actually great news. In March, HUD had temporarily increased the Orange County limit to $729,750, which was a huge increase from the original amount of $362,790. Because FHA requires a very small down payment, only 3.5% down as of January 1, 2009 (only 3% down prior to January 1), this will continue to allow First Time Buyers in Orange County cities such as Irvine, Newport Beach, Tustin, Orange, Santa Ana, etc to buy a home valued at $648,000 with only 3.5% down payment.
FHA has become the loan of choice in Orange County for anyone trying to purchase a home with less than 10% down payment. There are several reasons for this.
- FHA is more flexible than Conventional financing when it comes to credit and FICO scores.
- FHA only requires 3.5% down (effective January 1, 2009) versus Conventional financing, which in most of southern California still requires 10% down payment.
- FHA is flexible with the source of the down payment. 100% of the down payment can be a gift from a close relative.
- FHA allows a seller to pay not only closing costs for the buyer, but also “prepaid expenses” for the buyer, up to 6% of the purchase price. Conventional financing does not allow “prepaid expenses” to be paid by the seller. This can save the buyer several thousand dollars out of pocket.
Now is the time to Buy!
There has not been a better time to buy a home in Orange County for several years. Buyers are finding that once they have been Prequalified or Preapproved for an FHA loan, they can actually afford to buy a home that is nicer than the apartment they’ve been renting, and with all the tax advantages that come with owning real estate. Not to mention the $7,500 tax credit with is available for First Time Buyers. A great way for a potential First Time Home Buyer to find out is to request a Rent Versus Own Analysis from a Loan Officer or Mortgage Planner.
Written by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Frost Mortgage Lending Group for more information about an Orange County home loan. Ask for your Free Rent Versus Own Analysis. 877-786-4243 x 7.
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