FHA loan limit in Phoenix climbs to $346,250

FHA loan limit in Phoenix climbs to $346,250

By Catherine Reagor The Arizona Republic

Metropolitan Phoenix 's housing market received some good news last week. The new FHA loan limit for Maricopa is out. It's now $346,250, about $80,000 higher than before.

This means first-time borrowers can now use government-backed Federal Housing Administration loans to buy homes priced at nearly $350,000. And the higher limit will also help some struggling homeowners refinance adjustable-rate mortgages into fixed-rate FHA loans.

“A lot of people have been waiting for this,” said Amy Swaney, a mortgage banker with Scottsdale-based Premier Financial. “It will help many first-time buyers because only a 3 percent down payment is required, and it will help homeowners struggling to refinance because their values are down.”

The new limit is based on 125 percent of the metro Phoenix 's median home price, and that median home price is what was released by HUD last week. Allowing FHA to raise its loan limits was approved as part of Washington 's economic stimulus plan last month.

Other areas with higher median home prices and now higher FHA loan limits could see mortgage giants Fannie Mae and Freddie Mac raise their nonconforming loan limit above the current $417,000 threshold. But since 125 percent of metro Phoenix 's median price is still below $417,000, it's not likely to happen here.

The Valley's old limit was $263,150, and the higher lending limit will expire at the end of the year and revert back to that, unless real estate groups can lobby to have it made permanent.

Let Laura Boyajian with DPR Realty, LLC help guide you to and through an FHA loan. Contact her today at 602.400.0008.