If you are thinking of buying a home using an FHA loan in the Salt Lake City area, you may want to make that purchase before the end of the year.  Earlier this month, the U.S. Department of Housing and Urban Development Secretary Steve Preston announced the new Federal Housing Administration (FHA) mortgage loan limits for single-family homes for 2009 as prescribed by the Housing and Economic Recovery Act of 2008.   The limits for Salt Lake and Summit Counties are going to go from $729,750 to $600,300 at the first of the year.  In addition to that, the minimum down payment that a borrower must put down will be raised from 3% up to 3.5%.

"In today's environment where access to credit is being restricted, we need to make mortgage loans readily available to households throughout the country, and especially in high-cost areas," said Preston. "These new loan limits will ensure FHA can to continue help struggling homeowners refinance into safe, affordable government-insured loans, and allow many first-time buyers take advantage of today's buyers market"

For several years, FHA's loan levels were below the cost of the average home in communities across the nation, states the HUD news release. As a result, families who needed FHA mortgage insurance to qualify to buy a home were effectively locked out of the process. In some cases, borrowers turned to exotic subprime loans. Which of course contributed to our economic plight.

Higher FHA loan limits do not cost the government any money because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA-insured mortgage loans.

While historically a buyer in the upper price ranges did not have access to an FHA loan, now is a great time to take advantage of this FHA loan limit which has much better rates than a typical Jumbo loan.  Just remember that at the first of the year the limit goes from $729,750 to $600,300.

Call me at 801-518-4599 to further discuss or go to the Greater Salt Lake City Utah Real Estate Resource Center for additional information