The following excerpt is from yesterday's Arizona Republic. As the article states, this was a "quiet announcement" but one that your buyers need to hear.
FHA lowers limits on loans
Catherine Reagor - Nov. 19, 2008 12:00 AM
The Arizona Republic
There will be a new FHA loan limit for Maricopa County next year, and it's lower.
So if you were planning to buy a Valley home, now would be a great time to do it.
Starting in January, the maximum for the government-backed Federal Housing Administration loans in Maricopa County will be $271,050. Currently, the FHA limit in the Valley is $346,250.
The U.S. Department of Housing and Urban Development quietly announced the changes to FHA loans last week.
Last year, HUD raised its loan limits to try to help struggling homeowners who owed more than their house was worth and couldn't refinance anywhere else. The move also was designed to encourage more lenders and borrowers to use FHA loans in the tight credit market.
The FHA dropped its limit in Maricopa because it considers the Valley a "low-cost" area for housing. Metropolitan Phoenix's median existing-home price is now $175,000, according to the realty studies department at Arizona State University Polytechnic. That compares with $267,000 at the peak of the market in early 2006.
The FHA loan limit will fall to $271,050 in every Arizona county except Coconino, where it will be $333,500 because of Flagstaff's higher home prices.
Pricey home areas such as San Francisco will have a loan limit of $625,500, which is below the $729,750 that it was raised to last year.