Have you had your eye on a $400k home and had plans to use an FHA to purchase it?  You’ve got one month to get off the fence and pull the trigger because loan limits for FHA are going down.  Currently in Denver you can use an FHA loan to purchase a home for up to $406,250.  Effective Oct. 1, 2011 the limit will drop to $368,000 for Denver County.  What does that mean to you?

First off it’s bad for home seller’s in the upper $300′s price point.  Buyers are going to have to seek out Conventional loans and may have to put down as much as 20% vs. an FHA loan that only requires 3.5% into the deal.  Seller’s are going to have to reduce their home prices, hold or rent.  This could be quite an impact on home sales.

Why is HUD/ FHA doing this?

In 2008 Congress voted to suspend the limits on FHA loans that were scheduled to be implemented in 2009 as part of the Economic Stimulus Act of 2008 (ESA).  That suspension is up on Oct. 1st and barring any new action from Congress the 2009 limits will go into effect.

Click Here to Read the Official Press Release from HUD

Limits vary from county to county.  In Boulder the current FHA limit is at $460,000 and it will be changing to $402,500. In Alamosa you’ll see a loan limit of only $271,050.  Click Here for a complete list of the limits per State & County.

Now maybe the time to get off the fence and make that next purchase with an FHA loan before the limits fall.  Schedule a showing today for any property you find on 360dwellings.