In the midst of a continuing tightening of loan standards, we received some bit of good news, on FHA mortgage loan limits for metro Atlanta.

As you may or may not know, the max. loan limit for FHA loans in metro Atlanta was lowered from $346,250 to $320,850 beginning January 1, 2009.  Well, not HUD has reversed that decision, and the maximum loan limit for FHA loans in metro Atlanta has returned to $346,250.

A Real Life Example

That is good news for home buyers, and a brief story will tell you why.  Anectdotally, I have a friend who works for a large, national lender who called me back in December, the day before Christmas Eve.  He was frustrated, saying he had a borrower using FHA financing who needed the max loan amount of $346,250.  But, his national company had implemented the new lower loan limit immediately, just to preempt the national deadline of lowering the limit of Jan.1.

So, he had a borrower approved, but could not close the loan.  A desperate situation for he and for the borrower, who potentially would not be able to get into the home.  So, he asked me if I would take the deal, structure and close it at the higher loan amount.  But, we would have to close it before the end of the year!

Long story with a lot of work on my part, but more impressively on the part of the staff here – we took the deal.  I met the borrower and he re-signed out docs on Christmas Eve, then left town, while we did the work to approve the loan (my friend had, of course, paved the way nicely on the steps needed for approval).  We closed the loan on December 29, and saved the home for that borrower.

And now the higher FHA loan limits are back for metro Atlanta.  Now, will Down Payment Assistance come back?

(Hint:  Don’t count on it)