TIme to write your legislators again, folks! Those new FHA loan limits are scheduled to EXPIRE by the end of 2008 unless new legislation is passed to extend this deadline. As usual with this type of legislation, it's stalled in conference, and it seems that the voters need to make some noise to get our legislators to take action here. What's at risk? According to the National Association of Realtors (NAR), "Increased FHA loan limits will provide a much needed infusion of stability, liquidity and security into the market. If Congress lets the new limits expire, the fragile housing market will once again be thrust into a period of turmoil." If you'll recall, the FHA loan limits for the Los Angeles County area, including Santa Clarita, were increased to $729,750 recently, up from the prior limit of $362,790. If this increase is allowed to expire, we'll be right back where we started from, with FHA loans barely covering the purchase of a townhome. This also has a potential impact on jumbo and conventional loans as well, since industry experts expect the conventional loan limits to be increased to the new FHA limit, thus making those horrible jumbo loan rates a thing of the past for most home buyers. Here's a point and click way of sending a message out to our local representatives: 1. CLICK HERE to go to a one-step automated letter writing system called CongressLink, where you can write all of your representatives with one quick form. You can select email and/or snail mail delivery for your letter - they will send the letter for you automatically, based on the delivery method that you requested. 2. Paste this letter into the box: SUBJECT: Permanent Loan Limit Increase Key to FHA Reform Bill
BODY OF THE LETTER: As a constituent, I want to stress how important it is for FHA reform legislation to be quickly enacted. These bills, passed the House and Senate in 2007, are now stalled in conference. Permanent increases in the FHA loan limits, lowered FHA downpayment requirements, and new opportunities for condominium purchases are needed to create safe and affordable mortgage options for our state's homebuyers and those wishing to refinance. These changes will also provide much needed stability to our local housing markets and economies.
The new loan limits passed in the recently enacted Economic Stimulus bill will expire in less than 10 months. Dramatically reducing these limits at year's end will push our nation's fragile housing markets into turmoil once again. Realistic loan limits that permanently help ALL areas of the country are needed to bring stability to the marketplace.
FHA's downpayment levels led many borrowers to opt for the exotic, risky mortgages that have been the hallmark of the foreclosure crisis. The FHA reform bills will allow FHA to modify downpayment requirements and offer flexible financing to eligible borrowers.
In many areas of the country, condominiums remain the most affordable option for homeownership, but FHA owner/occupancy and documentation requirements, make it very difficult to purchase a condominium using FHA mortgage insurance. The FHA reform bills will move condominium financing programs into FHA's single-family program where they belong and ease the way for condominium purchases.
We cannot wait any further for FHA reform. Pass a permanent FHA reform bill NOW to give American homebuyers and homeowners the peace of mind they so desperately need.
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