Tuesday, December 10, 2013

FHA Lowers the Maximum Loan Amount for Jeffco to $391,000

[Published Dec. 12, 2013, in the Jeffco editions of the Denver Post's YourHub section]

Beginning in January 2014, the maximum size mortgage which FHA will insure has been adjusted downward.  The maximum amount varies from county to county, being highest in counties like Boulder where home prices are highest.  For the other Front Range counties, including Jefferson, the new maximum was reduced from $417,000 to $391,000.

FHA loans are attractive to first-time home buyers and others because they only require a 3.5% down payment, although there are lenders who will write non-FHA loans that are equally or more attractive.

Since the maximum amount for a conventional loan is also $417,000, I have asked the lenders I work with whether that limit will also be dropping, but the response I have received so far is that there are no such plans.  When the loan amount on a home purchase exceeds that limit, it is classified as a “jumbo” loan, which has traditionally carried a higher interest rate.

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