On November 18, President Obama signed a bill re-establishing higher loan limits on FHA loans. Below are some of the particulars about what-qualifies-for-what, straight from HUD:

Forward Mortgages:
Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect.

As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11:

  • Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11.
  • Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29.

The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame.

HECM:
Lenders are reminded that the maximum claim amount for HECMs is not affected by HR 2112 and the maximum claim amount for HECM remains at $625,500 as stated in Mortgagee Letters 10-40 and 11-29. This loan limit will remain the same for 2012 and will be included in the pending Mortgagee Letter.

AUS Systems:
Be advised that Automated Underwriting Systems (AUS) that utilize Total Scorecard may not be updated with the new mortgage limits. Lenders are reminded that when a case file is scored that exceeds the statutory loan limits, the results of the scoring event may reflect “approve/ineligible” or “accept/ineligible” and a feedback message identifying that the “ineligible” result is due to the loan amount exceeding the statutory county loan limits. Case files that receive an “approve/ineligible or accept/ineligible” may be eligible for endorsement under the applicable loan limits for the time periods described above.

You and your clients can get FHA tech support and answers to many FAQs HERE.