File this under “Things that surprise me”: The National Association of Mortgage Underwriters, quoting the Myrtle Beach-based Sun News, says that “FHA loan amount reductions have little impact.”
I think that’s entirely incorrect.
Follow the game of Telephone here. The FHA releases a statement that says ‘only a small number of borrowers will be affected.’ The Sun News doesn’t bother to check that statement before running the story. (That’s called reporting.) Then NAMU sees the story and quotes it as fact.
But it’s not fact. The reduced loan limits will have an effect.
As we explained earlier, in some areas there may not be much change. Roanoke, for example, will see its limits drop from $280,000 to $271,050.
But other areas will see a significant change. Essex County, for example — there, the limit will drop from $375,000 to $274,850. That’s more than 25 percent!
Frederick County? The FHA limit will drop by almost $204,000, from $475,000 to $271,050. Ditto Winchester.
We have the details in our previous post, “The critical piece of info you need about FHA loan limits.” Give it a read.