Department of HUD has released new limits for FHA mortgages. The new limits are effective with FHA case numbers pulled on or after January 1, 2015.
In the Minneapolis/St Paul metro area, the new base mortgage is $322,000. This includes most counties around Minneapolis and St Paul. Sherburne, Isanti, Sibley, Carver, Dakota are all at $322,000. If you are buying outside the metro area, you will want to check the county you are buying in. For example most of the outstate areas are limited to $271,050. If you are buying in Rice County or Goodhue County, you are limited to $271,050. Cook county is at $282,900.
FHA mortgages are a wonderful way for people to buy if they are limited in their down payment – FHA requires 3.5% down, it can all be a gift from a family member. That can really help people buy their first home.
If you have had credit issues, such as a bankruptcy or foreclosure, FHA is also more forgiving. FHA only requires 2 years after a bankruptcy, 3 years after a foreclosure.
FHA also allows up to 6% in seller paid closing costs. Usually the seller may not pay more than 3%, but they can pay more if they agree to.
FHA also has some special programs such as a 203K rehab loan. This will allow the buyer to make repairs or even update the home after closing. It allows the buyer to finance those repairs into the new loan. If the home you are buying needs a new furnace or maybe needs new carpet and applicances, a 203K rehab loan may be a good option for you.
There are also some benefits for teachers, fire fighters and police with a program called the Good Neighbor Next Door. It may allow you to get in with less down – maybe as little as $100.
For those considering purchasing a new home, FHA may be a good option for your mortgage. Make sure you talk to your lender about FHA options.