by Tim Storm | Jan 17, 2017 | FHA Home Loan
In December of 2016, FHA released an official statement announcing the increase of the 2017 FHA loan limits. This is the FHA loan limit increase in Orange County, CA since 2006. What is an “FHA loan limit”? The Federal Housing Administration (FHA) sets a limit, effective each new year, of what a buyer can borrow within each state county. They calculate this limit based on the average price a home is selling for in that area. That means that in places like Orange County the limit will be significantly higher than in a county with lower housing prices like Riverside County. This does not mean that you cannot purchase a home at a higher sales price, just that you as the buyer, will be responsible for coming in with the difference between the loan limit and the purchase price. What does this mean for Orange County Buyers? This is an encouraging change for many prospective Orange County home buyers that have the income, satisfactory credit, appropriate debt-to-income ratios but may not have the savings for a conventional loan program. The FHA loan limit for Orange County is now at $636,150. That is up $10,650 from last years limit of $625,500. As housing prices increase in this popular area it is a welcome opportunity. Let’s take a look at the median house prices in a couple of in demand cities to see how this new limit will be impactful: (Taken from Zillow 1/12/17) Costa Mesa: $725,200 Huntington Beach: $754,500 Santa Ana: $682,600 Anaheim: $553,900 Cypress: $624,400 Irvine: $776,600 Laguna Niguel: $790,500 Placentia: $661,300 Garden Grove: $545,200 Tustin: $670,400 Now look at the highest purchase price for the new loan limit, with the traditional 3.5% down: Purchase Price: $659,222 (<–Anything higher...
