FHA Loans and Refinancing in Kentucky
Now is a fantastic time to buy your first house. Sure, the economy is not as robust as we'd like and things are a bit slower than average, but that's actually what makes now a great time to get into the real estate market, especially for Kentucky buyers. Housing prices are at their lowest in recent memory, and there are an above average number of houses on the market at the moment.
Additionally, due to the stiff competition they're facing, sellers are more willing than ever to negotiate the terms of a sale and might be willing to reduce their asking price, contribute some money to closing costs, offer a home warranty, or provide other enticements to potential buyers. If you're considering buying that first home, consider obtaining financing through the Kentucky FHA loan program.
Benefits of FHA Loans
Kentucky FHA loans are administered by the Federal Housing Administration and provide opportunities for a wider range of buyers to obtain financing for their first home. Where most traditional banks require near perfect credit and a sizeable (20% is average) down payment to even be considered for a loan, Kentucky FHA loans tend to have more lenient terms thanks in part to a government guaranty which is issued to the lending institution for each loan.
FHA Loan Limits
Before participating in the Kentucky FHA loan program, check with your lender to make sure that the program is right for you. There may be restrictions or rules you hadn't considered. It's also important to obtain the current FHA loan limit for your county or city, since this is the maximum amount of money you can borrow from the Federal Housing Administration. Loan limits are applicable on each loan provided by the FHA, and there is one baseline limit for the entire country which is set each year and is based on the current median housing price for the country. The baseline amount is then adjusted for buyers who live in high cost of living areas to ensure that they can still take advantage of the program and own a home.
The 2009 limit for most Kentucky FHA loans is the baseline maximum, which is $271,050 for a single family dwelling. However, in some areas, the limit is increased due to the cost of living. For instance, Campbell county has a loan limit of $337,500 and in Jefferson county, the limit is $302,500. Since these limits are for single family dwellings, please check with your lender if you're considering the purchase of a multi-family unit with a Kentucky FHA loan as the limits are different.