THE MORTGAGE BROTHERS SHOW
FHA Loan Limit Increased to $331,760 for most Arizona Counties
In Arizona and most of the USA as of January 1st, 2020, FHA loan limits have been increased from $314,827 to $331,760. This is great news! If you’re a single-family residence the limit went from $314,827 to $331,760.
What did that mean for our borrowers from a purchasing price standpoint?
So, FHA loans requires three and a half percent down minimum. In 2019 and at the old limits, if you purchased a home for $326,000 you could put three and a half percent down and be at the 2019 limit. Now you can purchase a home at $343,000, put three and a half percent down, and be at the 2020 loan limits. So, $343,000. That’s almost $18,000 more in purchasing power than last year.
When is an FHA loan recommended?
The way we determine which loan is right for you is by credit and NDTI. In regards to credit, typically, anything above 700 we suggest leaning toward conventional loans. For anything below 700, we suggest looking at FHA. That’s where you’ll get better pricing. You’ll have a lower monthly payment for an FHA loan versus a conventional if your credit score is below 700.
There are a few other reasons that FHA loans might be the way to go. You could have an unlimited number of medical collections, FHA does not care and does not require them to be paid. Another is the seasoning requirements, or waiting periods, if you have a foreclosure or short sale. It’s only three years on an FHA loan, whereas, with conventional, it’s seven years on a foreclosure and four years on a short sale.
Is this just for single-family residences?
Nope! FHA will do loans on a two-unit property, a three, and a four-unit. As long as you occupy it as your primary residence, one of the units, you can purchase a duplex, triplex, or fourplex using FHA. We actually do these quite frequently. It’s a wonderful way to get into your first home, typically, and start your investment portfolio.
These loam limits have also increased. The loan limits for the two-unit is going to be $434,800. The three-unit has a loan limit of $513,450, and the four-unit is $638,100. So, you can buy a fourplex for almost $650,000 using FHA.
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Signature Home Loans, LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans. NLMS 1007154, NLMS number 210917, and 1618695. Equal housing lender.