Along with new loan limits for Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA) has also increased its limits, basically to the same amount.
This increases options for borrowers in Boston.
In the past, the low limits for FHA loans meant they were of little use for anyone buying a condo in the city.
Now, however, with a loan limit of $523,750 for a single-family home,
FHA loans now are slightly cheaper than conventional loans backed by Fannie and Freddie, a reverse of the normal situation. Last week, the average rate on FHA loans was 6.29%, while conventional loans were at 6.36%, according to HSH Associates, a publisher of financial data.
The other advantage to an FHA loan is, potentially lower down payment amounts, as little as 3%.
Buying a condo? Expect the same levels, income, and loan requirements.
Source:FHA May Be Tonic for What Ails the Housing Market – By James R. Hagerty, The Wall Street Journal