Riverside County had the 1oth highest decrease in FHA loan limit statewide and the most in Southern California. You can view all counties FHA loan limit decrease on the WSJ site.
The max FHA loan limit in the Riverside County/San Bernardino/Ontario MSA has been $500,000 since 2008 when the Economic Stimulus Act (ESA) was passed to bring liquidity and affordable FHA home financing to home buyers and home owners wanting to secure low rate home financing.
2014 Riverside County Loan Limits
How Will Lower FHA Loan Limits Impact FHA Buyers in Riverside County?
John Butler, a tech savvy Realtor® in S.W Riverside County cities of Temecula/Murrieta/Menifee shared some stats with me that give us an idea of the future impact.
From January 1, 2013 to Dec. 6, 2013, there were 675 homes sold in Temecula between $355,000 and $500,000. 14% of those buyers used FHA financing.
Starting Jan. 1, 2014, those buyers will no longer qualify for FHA financing.
So What, Not a Big Deal?
Well, 99% of these buyers are using FHA financing for a reason. Most cannot qualify using Conventional financing for various reasons (lack of down payment or had a former short sale/foreclosure/bankruptcy).
2014 will see fewer buyers in that $360,000-$500,000 price range, which means downward pressure (less demand). Less demand means prices go down.
And don’t forget the recent changes that made FHA loans more expensive and the MIP permanent, along with new mortgage regulations in 2014 coming down the pipe that will make it more difficult for buyers to qualify.
P.S. – Don’t forget to ask me about receiving a lender credit or eligibility for down payment or closing cost assistance.
Related Articles of Interest:
- How Much Can I Qualify For?
- Riverside County Home Buyer Assistance Programs
- 15 Sources for Down Payment Money
- Should you Buy a Home with a Low or No Down Payment?