FHA Loan Limits may be lowered in Essex county.

According to a market analysis brief issued at the end of May 2011 by the U.S. Department of Housing and Urban Development, there is the possibility of FHA loan Limits for single family units being lowered beginning October 1, 2011

Barring Congressional action, Federal Housing Administration (FHA) loan limits will revert back to loan limits determined under the Housing and Economic Recovery Act (HERA) of 2008.  As a result...

 FHA loan limits in Essex county would likely decline from $523,750 to $465,750

The mechanics: Suppose you have a home with  a market value of $500,000 and you wish to sell. You would have to reduce your selling price in order to accommodate the buyer's loan requirements for FHA. In many cases this could mean sellers finding themselves under water since FHA is financing the majority of buyers these days it would be much more difficult to locate a qualified full value buyer.. 

It would appear to me that any action,  impeding  a home sale would be detrimental to an already fragile market to the effect of lowering property values even further.

Indeed if you are looking to purchase or re-finance a home in Essex county and the loan amount is greater than $465,750 you need to get your application in and plan to close the loan in the next few months. I have been given to understand that many lenders will not accept loans under the old limits after Sept. 1st.

If you would like more information on this topic, please call or email me and I will put you in touch with a qualified lending professional.

Credit: Kris Berg:  Sandiegocastles.com/  for the inspiration for this post. I regard Kris as a consummate real estate blogger and from a business competition viewpoint;  very happy she is on the west coast.