2014 San Joaquin County loan limits have been announced by HUD, Dept. of Veterans Affairs, and Fannie Mae. Unfortunately FHA reduced San Joaquin loan limits, while VA and Conventional limits were left relatively unchanged.
HUD reduced the San Joaquin County max FHA loan limit from 488,750 down to $304,750. That’s a reduction of $184,000 which is a 37.6% loss in FHA buying power. According to the Wall Street Journal, San Joaquin County had the 2nd highest reduction in the state and 15th highest in nation. You can view all FHA loan limit decreases on the WSJ site.
2014 Loan Limits
|Loan Limits||1 Unit||2 Unit||3 Unit||4 Unit|
|Fannie Mae/ Freddie Mac||417000||533850||645300||801950|
How will lower FHA loan Limits affect San Joaquin County?
James (JJ) Godi, of Art Godi Realtors in Stockton shared some interesting stats with me regarding a property search he did using Metrolist. From January 1st 2013 through Dec 31st 2013 there were 1,764 homes sold in San Joaquin County between $304,750 and $488,750, and 22% of those were purchased using FHA financing. That means that 22% of FHA borrowers wouldn’t be able to buy that same home in 2014. There are currently 245 active home listings in San Joaquin Valley with price points between $304,750 and $488,750 that now have fewer potential buyers.
What does this mean?
FHA isn’t an option buyers choose nowadays; it’s likely there only option. First time buyers find FHA to be the only choice due to expensive and restrictive conventional guidelines for those with less than perfect credit and limited assets. Those buyers will be forced to improve credit and save more. FHA also permits shorter wait periods for borrowers with short sales, foreclosures, and bankruptcies. Conforming conventional loans allow down payments as low as 5% and credit scores of 620, but they typically price them differently than FHA.
How do I combat this?
- Reduce your offers under the $304,750
- Switch to a conventional loan (5%, 10%, 20% Down)
- Purchase a home in a rural area under the USDA loan program (0% Down)
It’s important to review all options available and contact me direct to discuss this personally. Mobile 209-565-4540 | Office 209474-7111