In 2014 many North Carolina cities will see FHA Loan limit changes as the FHA Maximum Loan Limits in NC move lower.
For the vast majority of North Carolina, the maximum FHA Loan will be $271,050. During the past several years, the average Loan Limit for most Metropolitan areas in North Carolina has been $313,500 (excluding the very North East Counties that are at the High Cost Limit). This is a FHA Loan Limit Change for Raleigh, Charlotte, Asheville, Boone, Wilmington, Jacksonville, Kill Devil Hills… and many, many more cities in North Carolina.
Cities affected by the FHA Loan Limit change in the Raleigh area includes Cary, Apex, Holly Springs, Fuquay Varina, Garner, Clayton, Smithfield, Benson, Knightdale, Wendell, Rolesville and Wake Forest. See the map below, this is a pretty big area! Why is it significant that the maximum loan limits for FHA are changing from $295,000 to $280,600 for Raleigh? FHA Loans in Raleigh are very popular, partially because:
- FHA Home Loan Down Payment requirements are only 3.5%, and all of that money can come from a gift. If you are using the First Time Home Buyer Grant program is only $225,000 – so this change does not affect that program.
- FHA Home Loans allow folks with recent Bankruptcy, Foreclosure or Short Sales to purchase a home 12 months after the hardship, as long as the problem occurred as a direct response to a job loss. No other mortgage program has this provision.
- FHA Mortgage Loans in Raleigh can work for folks with middle credit scores under 620 – most mortgage programs will not work for folks with credit scores under the 620 benchmark.
However, perhaps the most significant reason we want folks to understand that the Raleigh FHA Loan Limit is going down is because in some parts of Raleigh NC, SELLERS will be forced to decide if they want to drop their sales price to meet the new FHA Loan Limits – or do they just want to ignore this segment of the Real Estate Market?
Cities affected by the FHA Loan Limit change in the Charlotte area include Gastonia, Belmont, Concord, Matthews, Mint Hill, Monroe, Waxhaw and Wadesboro. According to the Charlotte Realtors Association, the Average Sales Price for Mecklenburg County (in the South Area 5) is already well over $400,000. Other parts of Charlotte, obviously, are below the new $271,050 FHA loan limit change.
Again, why is it significant that the FHA Loan Limits in the Charlotte area are changing? In 2009, 2010 and 2011 FHA announced changes to the maximum loan limits for this area. Several months later, they “rolled” the changes back to the levels that were in place in 2008.
From the “rhetoric” coming out of FHFA (they oversee FHA) offices, we do not believe that these limits will go any higher unless a large number of people contact their Congressional Offices and let them know that people in Charlotte (and Raleigh and Wilmington – you get the picture) rely on the FHA Loan program to buy houses!
If you are a Home Seller in Charlotte, and you want to sell your home at the $314,700 mark, you will currently accommodate the FHA Home Loan Buyer. NOW, you are faced with either missing the FHA Home Buyer altogether, because the maximum sales price they can buy with 3.5% down payment is $280,880, or you can drop your sales price by some $40,000.
THIS is the REAL issue with the FHA Loan Limits going down. It could literally force Sales Prices down in certain areas. If you are a First Time Home Buyer – this could mean a short-term BONUS for you.
This is NOT one of those moments in time where buyers need to make offers on homes WITH OUT a Real Estate Agent to Represent you! With situations like this, you could end up in a bad situation. Home Buyers REALLY need a Real Estate Agent to help negotiate the best price, especially if you are in one of these FHA price limits.
Have more questions about the FHA Loan limit changes? Please call Steve and Eleanor Thorne 919 649 5058 if you’d like for us to pre-qualify you to purchase your First Home (or your second or third!)