South Pittsburgh Reporter - Serving South Pittsburgh Since 1939

FHA loan limits temporarily increased


April 22, 2008

With all of the challenges consumers are facing in today's housing market, there is some good news. The loan limits for FHA products have been temporarily increased nationwide, which will allow more borrowers to experience the benefits and protections afforded by FHA loans.

The non-profit Pennsylvania Association of Mortgage Brokers (PAMB) offers consumers information on these loan increases that will be offered through December 31.

 The Department of Housing and Urban Development (HUD) will offer temporary FHA loan limits, ranging from $271,050 to $729,750. The maximum amount of $729,750 will only be applicable to extremely high-cost metropolitan areas. Previously, FHA's loan limits in high-cost areas were capped at $362,790. The new minimum and maximum loan limits are based on 65 percent and 175 percent of the conforming loan limits for Government-Sponsored Enterprises in 2008. HUD states that the change in loan limits will help provide economic stability to America's communities and give homeowners and homebuyers a safer, more affordable mortgage alternative.

 Consumers must meet the following criteria to qualify for an FHA loan under the new limits:

• Minimum down payment of 10 percent

• Minimum FICO credit score of 700 for any loan with less than a 20 percent down payment. “Nontraditional” credit histories as alternatives to FICOs are not permitted

• Minimum 40 percent down payment and 660 FICO for second homes and investor properties

• No balloon or negative-amortization payment terms allowed

• Household debt-to-income ratios cannot exceed 45 percent

The new limits in Pennsylvania are available at For more information and FHA loan requirements, visit

To find a mortgage broker in your area, visit, and ask the broker if they are certified to originate FHA loans.

 The Pennsylvania Association of Mortgage Brokers is composed of licensed mortgage professionals who strive to attain the highest degree of excellence and customer service available. PAMB members also subscribe to a code of ethics. For more information, visit or call the Association office at 888-311-PAMB.


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