At least in my office, on November 14 we began getting new pricing for FHA loans that previously would have been priced as FHA Jumbo. In Orange County, CA, any FHA loan that was greater than $362,790 was considered FHA Jumbo and was priced almost .5% higher in interest rate. I actually have a new home buyer I'm working with who fell into that category. Their loan amount is just under $415,000. On November 12 I was quoting them an FHA Jumbo rate but told them I expected (hoped) is would be better with the new limits being activated. Two days later I was able to offer them a rate .5% lower than the Jumbo FHA.
For a buyer in Orange County, CA who is looking in a price range that will yield a loan amount greater than $625,500 (the new FHA limit) and lower than $729,750 (the temporary "FHA Jumbo" limit), it is time to quickly get off the fence and aggressively make offers. The temporary limits will be gone at the end of December, but lenders will most likely have earlier cutoff dates.
$625,500 will work for most home buyers in Orange County, CA
Also, effective January 1, buyers will need 3.5% down payment rather than the old guideline of 3%. This should not hurt too many buyers. Plus FHA is still flexible with down payment gifts, or even accessing a 401K without counting the payment against the borrowers debt to income ratios. FHA is still the loan of choice for anyone looking to buy a home with less than 10% down.
If you are thinking of buying a home in Orange County, CA, contact me at 877.786.4243 x 7 and I'll prepare a full loan analysis for you as part of the prequalification and preapproval.
