While no press statement has been made by the U.S. Department of Housing and Urban Development yet — a formal announcement is expected later today or early tomorrow — officials at Federal Housing Administration say they have boosted the FHA lending limit in 14 California counties, according to a report published Wednesday evening in the Wall Street Journal. The Journal reported that FHA officials confirmed that the FHA increases will also apply to government-sponsored entities Fannie Mae and Freddie Mac. From the story:
Details for the rest of the country are due to be announced this week. California counties such as Los Angeles and Orange will be eligible for the maximum limit, which was raised from $362,790. Lower- priced regions, such as Trinity and Lassen counties, will qualify for a loan cap of $271,050, up from $200,160 … The FHA said there would be an appeal process through which the new loan limits could be raised higher for counties that aren’t now eligible for the $729,750 maximum, but none of the limits will be lowered, said Bill Glavin, special assistant for public affairs in the FHA’s Commissioner’s Office. That appeals process could be announced, along with new loan limits for the rest of the country, as early as Thursday. “From what we understand there are not going to be a lot of areas in the country except for California that are going to be at the maximum,” Mr. Glavin said.
While HUD hasn’t yet publicly released its complete loan limit data, HUD secretary Alphonso Jackson did comment on the FHA increases in California earlier this week. “Because the FHA loan limits didn’t reflect the housing market in California and other high-cost states, a vacuum was created that was filled by exotic subprime loans. We estimate that nearly 33,000 Californians will benefit over the next 18 months,” Jackson said in speech to the Commonwealth Club of California on Tuesday. Jackson said that FHA will publish a complete list of new, temporary loan limits this week. “FHA is back. And we’re letting the American people know about it, sending letters out to 850,000 homeowners with resetting rates, including 54,000 Californians, who might qualify for FHA,” he added.