FHA Loans in California
California is well-known for many things, including its expensive real estate market. Despite the current economic downturn, housing in California is often difficult to break in to due to the huge amount of the investment required.
Many buyers get discouraged at the housing prices they see and assume that they cannot afford to buy a house, but if there is any way you can afford to purchase a house now, it's a great time. Housing prices are very low right now due to the economy, and buyers are very motivated to sell.
Who Should Get an FHA Loan in California?
You might want to seriously consider the FHA loan program in California, if you meet any or all of the following criteria:
- You're a first-time home buyer.
- You don't have a lot of money to put down on a house.
- You want to keep your monthly payments as low as possible.
- You're worried about your monthly payments going up.
- You're worried about qualifying for a loan.
- You don't have perfect credit.
Because the Federal Housing Administration underwrites California FHA loans, lenders are typically more lenient when it comes to approving these loans which means that you have a better chance of getting the loan for the house of your dreams!
California FHA Loan Limits
Before you run out and pick out the huge, sprawling house you've always dreamed of, however, keep in mind that the FHA does set limits on the amount of money to be loaned on a California FHA mortgage. The limit is set each year based partly on median home prices for the nation and varies according to the cost of living in your area. The minimum amount for the program is $271.050, but in California (due to the high cost of living) the limits are higher. For the Los Angeles area, the limit is $729,750, San Diego's limit is $697,500, and the limit in San Francisco is also $729,500. These limits are on single family dwellings, so if you're considering purchasing a multi-family unit, you'll need to check with your lender regarding the limits on that type of housing.