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Mezzanine/equity financing--What is it?

National Mortgage Professional
Jun 22, 2006

HUD announces higher FHA home loan limitsMortgagePress.comFHA loans United States Department of Housing and Urban Development Secretary Alphonso Jackson has announced that the Federal Housing Administration (FHA) has increased its single-family home mortgage limits by more than 15 percent. Effective Jan. 1, FHA will insure single-family home mortgages up to $200,160 in standard areas and up to $362,790 in high-cost areas. The high-cost amount is almost $50,000 more than last year. The loan limits for two-, three- and four-unit dwellings have also increased. The FHA is sending letters to thousands of mortgage lenders and brokers to make them aware of the higher rates that can help families. "This administration is working to make homeownership more affordable and accessible, so that more families can own a piece of the American dream," said Jackson. "These higher loan limits will strengthen the economy by helping to create more construction and more jobs, while contributing to the president's commitment to create 5.5 million new minority homeowners by the end of the decade." Last year, the loan limits were $172,632 in standard areas and $312,895 in high-cost areas. Five years ago, the limits ranged from just $132,000 to $239,250. These levels were below the cost of many homes in many communities. As a result, families who needed FHA mortgage insurance to qualify to buy a home were effectively locked out of the process. The new loan limits are part of an annual adjustment HUD makes to account for rising home prices. Under federal law, loan limits are tied to the conforming loan limits of Freddie Mac and Fannie Mae, federally chartered corporations that buy and package mortgages. HUD calculates the FHA mortgage loan limit for 3,226 geographic areas within the United States. The limits vary from area to area, but all fall within the new range of $200,160 to $362,790. Higher FHA loan limits don't cost the government any money, because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA insurance. Many low-income and first-time homebuyers are attracted to FHA-insured loans, because the agency requires only a 3 percent down payment, and this year's increases in insurance totals should only serve to intensify interest. The increases will also benefit senior citizens who qualify for FHA-insured reverse mortgages. For more information, visit www.hud.gov.
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