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HUD OKAYS 31 PERCENT INCREASE IN FHA MORTGAGE LIMITS IN HAMPTON ROADS AREA
Increase Based on Sales Data Submitted by Williamsburg Area Association of Realtors, But Covers Entire Hampton Roads Metropolitan Area

RICHMOND – The U.S. Department of Housing and Urban Development has approved a 31 percent increase in the maximum mortgages that can be insured by the Federal Housing Administration (FHA), a part of HUD.

The increase was approved on September 14th based on a request and recent home sales data submitted by the Williamsburg Area Association of Realtors.

The higher FHA mortgage insurance limits cover home sales in the entire Hampton Roads/Tidewater metropolitan area, including Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg and Isle of Wight, Gloucester, James City, Mathews, Surry and York counties in Virginia as well as Currituck County in North Carolina.

As a result of HUD’s decision, the FHA mortgage insurance limit on one-family homes will rise from $217,550 to $285,093; the FHA mortgage limit on two-family homes will rise from $245,030 to $321,105; the FHA mortgage limit on three-family homes will rise from $297,700 to $390,127; and the FHA mortgage limit on four-family homes will rise from $343,500 to $450,157. The increases are effective immediately.

"The housing market in Hampton Roads remains very strong," said HUD Richmond Field Office Director Mary Ann Wilson, “and this increase permits FHA to remain very competitive as an tool for homebuyers – particularly first-time buyers – to own a home and, with it, a piece of the American Dream."

Over the last 10 years, FHA has insured some 117,700 mortgages in the Hampton Roads area with a total dollar value of $10.5 billion.

The increase in loan limits will enable more working families to become homeowners and will help the FHA mortgage insurance program to keep pace with the robust housing market. Low-income and first time homebuyers are attracted to FHA-insured loans because the agency requires only a three percent downpayment and permits family and friends to contribute to the initial home buying expenses. In addition, FHA has more relaxed credit standards and permits borrowers to carry more debt than private mortgage insurers typically allow.

The higher FHA loan limits will not cost the government any money, because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA insurance.

The increases will also benefit senior citizens who qualify for FHA-insured reverse mortgages. Reverse mortgages allow homeowners age 62 and older to borrow against the value of their homes without selling them. Homeowners can select a lump-sum payment, monthly payments or tap into a line of credit. No repayment is required as long as a homeowner lives in a home with a reverse mortgage. The reverse mortgage is repaid, with interest, when a homeowner sells the home or dies.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.