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The maximum used to be $362,000 which, in California is basically a rat hole if at that. But theyve adjusted their limits to accomodate very expensive places.
$729,000 is a much more reasonable amount-still not a great house in a great neighborhood, but a comfortable house in a relatively better area.
Anyway,
The new FHA loans are now available to 14 California Counties and will probably be offered to the NY Metro and Hawaii at some future date.
Northern CA
Alameda
Contra Costa
Marin
Monterey
Napa
San Benito
San Francisco
San Mateo
Santa Clara
Santa Cruz
Southern CA
Los Angeles
Orange
Santa Barbara
Ventura
Not sure how much help this will be in solving the housing situation in California. FHA set the limits higher to make it easier for banks to repackage the "insured" mortgages into securities and sell them into the secondary market. The problem is, the demand for mortgage-backed securities has diminished tremendously since the housing bust began in 2005-2006.
The idea is to stoke investor demand for securities made up of more expensive mortgages - so-called jumbo loans - backed by Fannie and Freddie, the two biggest mortgage financers in the country. That would drive interest rates lower and spur home buying and refinancing.
Wow. Sometimes you forget how expensive homes are out there.
Hopefully this will help California.
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