28 Feb New Loan Amounts in 2020: What Does This Mean For You?
This year, the Department of Housing and Urban Development (HUD) increased FHA loan limits in most U.S. counties. This is great news if you’re looking to buy a home and qualify for an FHA loan. But what does that really mean?
In simple terms, it means that FHA borrowers now have a larger budget when looking to purchase a home. But let’s break down the basics:
FHA loans have more lenient qualification requirements
It’s easier to qualify for an FHA loan than for a conventional mortgage. FHA loan rules make allowances for borrowers who might not have an extensive credit history or who need to use gift money to make a down payment, for example. Here are the basic requirements to apply for an FHA loan:
> Credit score of 500 or higher.
> Debt-to-income ratio of 50% or less.
> 3.5% minimum down payment.
> The home must meet the FHA’s minimum property requirements and be your primary residence.
What is an FHA Loan?
The FHA loan is meant for low or moderate income borrowers looking to purchase a home. These loans are what can allow these borrowers to qualify for their mortgage with lower minimum down payments and lower credit scores.
How can I qualify?
> Specific qualifications include:
> FICO score of 580+ (with 3.5% down payment)
> Verifiable employment history or income
*Note that everyone’s situation is different, and if you’re seriously wondering if you can qualify, give me a call! I’d love to help you find out if you can qualify for an FHA.
What is an FHA Loan Limit?
An FHA Loan Limit is the limit of money that the Federal Housing Administration (FHA) can insure for mortgage loans*.
*Loan limits vary depending on the value of a house and are subject to change annually, via Freddie Mac and Fannie Mae guidelines (Freddie and Fannie are the two government-sponsored enterprises that purchase mortgages and sell them to investors through channels like Wall Street).
The current 2020 FHA loan limits:
Limits for FHA Loans in Clark County, Nevada range from $345,000 for 1 living-unit homes to $663,450 for 4 living-units. Conventional Loan Limits in Clark County are $510,400 for 1 living-unit homes to $981,700 for 4 living-units. The 2020 Home Equity Conversion Mortgage (HECM) limits in Clark County is $765,600. HECM limit does not depend on the size of the home.
So, what exactly does this mean for you?
This means that if you’ve been thinking about buying a home, now is a GREAT time to see if you can qualify for an FHA loan and see if you can take advantage of these new high loan limit amounts!
Give me a call or text at (702)-499-6556 so we can see how you qualify and we can get you started on your mortgage process today!