2009 is sneaking upon us very quickly. In the mortgage business that means new loan limits. Hooray! Traditionally, this means that the OFHEO (Office of Federal Housing Enterprise Oversight) releases their Housing Price Index data, which results in higher loan limits for FHA, VA and Conforming (Fannie Mae & Freddie Mac guaranteed) types of loans.
This year’s data doesn’t warrant an increase in the loan limits, but thanks to decisive action by our fearless leaders, we have new rules that expand the available loan amount limits by examining home prices at a more regional level. For many counties across the contiguous United States, the loan limits will stay the same, but for High Priced Counties, the loan limits are now adjusted according to the cost of an average home in the county. Here in Hawaii, each island has its own limit, but they all exceed the prior limit of $625,500 that had been in effect for the past two years.
For VA loans in Honolulu for 2009, the new loan limit is $783,750! The best news is that 100% financing is available all the way up to that loan amount. A change from the ‘Wild West’ times of years past, this is the responsible way to lend without a down payment. The VA loan program has maintained essentially the same guidelines for the past 30 plus years and has always seen strong loan performance without requiring a down payment. All income must be documented, co-signers are limited to spouses or other military and there are clearly defined requirements for Debt-to-Income ratios and residual income.
Clearly, not everyone will qualify for such a large loan, but it’s great to know that the VA is there for our service members and veterans no matter where they choose to live, especially here in paradise, where housing prices continue to be at a premium.