Limits are increased for FHA-insured loans

In response to rising home prices, limits for several types of FHA-insured loans have been increased the third time this year throughout much of Western Washington.

This means that homebuyers, seniors seeking reverse mortgages, and members of federally recognized Indian tribes can now get loans up to $312,895 in King and Snohomish counties. That's an increase of almost $7,000 over the previous limit.

New mortgage limits also have been announced for these counties: Kitsap, $241,950; Mason, $185,250; Skagit, $214,000; Thurston, $213,750; and Whatcom, $245,600. The limits were increased in January and again in June. Like those two, the latest occurred "because we're trying to keep pace with the increases in home prices," said Pam Negri, spokeswoman for the Department of Housing and Urban Development in Seattle.

Homeowners can use FHA loans to buy or refinance single-family houses, condominiums and manufactured homes that are permanently affixed to foundations. Purchases of duplexes, triplexes and fourplexes also qualify as long as one of the units is owner-occupied.

The higher limits also apply to homeowners who take out the FHA's version of a reverse mortgage, called a Home Equity Conversion Mortgage. According to Negri, the FHA has the largest share of the nation's reverse-mortgage business so the new loan limits will be especially helpful to homeowners age 62 and up who want to tap significant home equity.

Reverse-mortgage holders can select the type of payment they want — lump sum, monthly amount or a line of credit — and no repayment is required as long as the borrower lives in the home.

More information

To learn more about FHA loans, visit www.hud.gov or www.espanol.hud.gov on the Web.

The new limits also will help Native Americans who want to buy homes in more expensive urban areas. Under the Section 184 Indian housing guaranteed loan program, members of any federally recognized tribe can buy a home on or off of a reservation or trust lands.

FHA home loans, in general, are available to a wide range of buyers, Negri said, because they have liberal borrowing guidelines, require a 3 percent down payment (which can be in the form of a gift), offer consumer protections, and are not restricted to first-time buyers.

Negri says she expects mortgage limits to rise again in January.

Elizabeth Rhodes: erhodes@seattletimes.com