FHA

The Federal Housing Authority (FHA) is a government agency that insures mortgages issued by approved lenders. FHA insured mortgages present a very good financing alternative for borrowers who may not meet Fannie Mae or Freddie Mac guidelines.

These loans require a lower downpayment and have less stringent credit requirements. Borrowers must , in a purchase situation, invest a minimum of 3% in their own funds and live in the property. The maximum LTV is 97% for purchases and rate/term refinancing. A borrower can cash out at 95% LTV!

The table below shows the maximum loan amounts for each category of property. These limits are lower than conventional mortgages.
FHA AND VA loans are known as government loans while private sector loans are known as conventional loans. These new words should not be confused with conforming loans and Jumbo programs that are the subject of a previous blog.
If your head is spinning and you need help sorting this out, just call me at 773-562-6972 or e-mail me at: info@p2funding.com

FHA mortgage limits: Mortgage maximums as of Thursday August 23, 2007
MSA Name : CHICAGO, NAPERVILLE, JOLIET, IL METROPOLITAN DIVISION
MSA Code : 16980
Division : 16974
County Name : COOK
CountyCode: 031
State: IL
One-Family: $275,200
Two-Family: $309,962
Three-Family: $376,589
Four-Family: $434,526
Last Revised: 01/01/2005 (source: www.hud.gov)