Last week, Congress passed a bill raising the FHA upper limit for Los Angeles and other “high cost” areas back to $729,750 and President Obama signed it into law on Friday. However, whereas before the expiration of the upper loan limits, these loan limits applied to all GSE loans including Freddie Mac, Fannie Mae and FHA, this time the limit will only apply to FHA. Freddie Mac and Fannie Mae loans still remain at the lower limit of $629,500. This will mean that FHA loans become even MORE popular than they are now.
The thing about FHA loans, as we have discussed in this column, is that for condominium complexes they are limited to approved complexes or fully detached units. Several lenders I work with have been successful in getting FHA approval for condo projects that were not previously approved, especially Nader Chahine of Cornerstone Mortgage.
This is great news for us in the South Bay, as that extra $104,250 makes a big difference in being able to purchase much of the housing stock in Redondo Beach, West and South Torrance, Southwood, the Hollywood Riviera, El Segundo, and other mid-priced neighborhoods in the South Bay and Palos Verdes area.