The Federal Housing Administration temporarily will raise the limits of loans it will insure to nearly $730,000 in certain areas, the chief of the U.S. Department of Housing and Urban Development said at a meeting Wednesday at the Treasury.
"FHA is over 20 percent of the mortgage market," HUD Secretary Shaun Donovan said. "Ensuring that FHA is a constructive part of the solution is a critical part of this."
FHA loan limits in high-cost areas had been capped at $625,000. The increased limits are scheduled to stay in effect through 2009.
This makes housing more affordable for many would be homeowners; FHA has lower down payment guidelines and is more flexible on fico scores.
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