Do you plan to use an FHA-insured mortgage loan to buy a home in Orange County, California in 2017? If so, we have some good news. The FHA loan limit for Orange County will rise by more than $10,000 in 2017, compared to last year.
This gives borrowers a higher level of financing to work with, which could make it easier to find a suitable home to purchase.
Orange County, CA FHA Loan Limits in 2017
Let’s start with the numbers. In 2017, the FHA loan limit for a single-family home in Orange County is $636,150. That’s the most you can borrow to buy a home within the county, when using the FHA mortgage program. This is more than $10,000 higher than last year’s limit of $625,500.
That’s for a single-family home. Higher caps are permitted for multi-family properties, such as duplexes and triplexes. The table below shows the 2017 Orange County FHA loan limits for all categories.
Changes Made Due to Home-Price Gains
The Department of Housing and Urban Development (HUD) manages the FHA program. In December of 2016, HUD announced that it would raise the FHA loan limits for most counties across the United States. They did this in response to significant home-price gains that occurred during 2016.
In a December 1, 2016 press release, HUD officials stated the following:
“In high-cost areas [like Orange County, California], the FHA national loan limit ‘ceiling’ will increase to $636,150 from $625,500. FHA will also increase its ‘floor’ to $275,665 from $271,050.”
HUD considers Orange County to be a “high-cost area,” as far as loan limits are concerned. And rightfully so. According to the real estate research team at Zillow, the median home price in the county had risen to around $670,000 by the end of 2016, and it still appears to be climbing. House prices rose by nearly 5% last year.
FHA loan limits are based on the conforming caps established by the Federal Housing Finance Agency, which in turn are based on median home prices. So when house values rise significantly from one year to the next, loan limits tend to go up as well. This is what happened for Orange County, California, from 2016 to 2017.
In other good news, FHA mortgage insurance is being reduced for 2017.
Is an FHA Mortgage Right for You?
Every type of mortgage loan has certain pros and cons associated with it, and the FHA programs is no exception. The key is to choose a loan product or program that best meets your needs. Here are some points to consider.
FHA loans are popular among Orange County home buyers who are looking for a low down payment mortgage option. This program allows eligible borrowers to put down as little as 3.5% of the purchase price or the appraised value, whichever is less.
First-time home buyers in particular are drawn to FHA loans. In fact, most of the people who use this program are first-time mortgage applicants. But the programs is not limited to this group.
There are other benefits to using an FHA loan to buy a home in Orange County. Generally speaking, the qualification criteria are a bit more flexible, when compared to conventional financing.
Bridgepoint Funding has been serving home buyers in California for more than 16 years. We offer competitive rates on a variety of products, including the Federal Housing Administration’s loan program.