This week Congress restored the loan limits for the Federal Housing Administration (FHA) for two years. REALTORS® across the US met with Legislators, Congressmen, FHA, Fannie Mae and Freddie Mac executive to fight to preserve the FHA loan limits, and it has worked and is a victory for home-buyers. The National Association of Realtors (NAR), and local associations and REALTORS® worked from grassroots to National levels to get a message to decision makers, and it worked.
In late September the FHA, Fannie Mae; and Freddie Mac loan limits were reduced in 42 states pricing potential home buyers out of the American Dream of home ownership and holding back the housing recovery.
NAR immediately went to work with the goal to get the loan limits restored in Congress. For weeks that goal seemed unlikely.
Countless REALTORS® worked to educate Congress that well-qualified buyers didn’t need yet another hurdle to access affordable mortgage financing.
They finally listened. Because we were persistent. And because we were right.
The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets, the floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie Mae and Freddie Mac. Fannie-and-Freddie-backed mortgages will remain at 115 percent of local area median home prices up to $625,500.
NAR believes the reinstated loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families throughout the country, not just wealthy individuals or those in costly markets. Nearly two-thirds of buyers who will be helped by the loan limits provision have incomes below $100,000. Without FHA loans and these limits in the Tallahassee, FL area, we would, as would the rest of the nation, probably be in for yet another recession. Let’s put this in perspective. Given a purchase price of $275,000 FHA would require $45,375 less down than that of a 20% conventional loan (if you’re not quite convinced that is meaningful then just think how long it would take you to save another $43,375). REALTORS® are working for consumers in many ways.
The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR will continue to press Congress to use the additional time to complete their work on a five-year re-authorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.
REALTORS® will work to preserve, protect and defend the American Dream of Home Ownership. So, when you begin your search for a home, ask the agent you find if they are a REALTOR® and why that is important to them and to you!
Our team values their association as REALTORS®. Search for your Tallahassee home for sale with us, we will advocate for you!
*Source FloridaRealtors.org