On Jan. 1, the Federal Housing Administration reduced the maximum loan amount in Santa Barbara County from $729,750 to $625,500.
FHA loans have typically been for first-time buyers of our lower-end properties. The loan down payment requirement (3.5 percent) means that having bags of cash is not required to purchase a home in our area, just substantial income and good credit.
This reduction has undoubtedly removed the chance for would-be homebuyers to own even the most basic single-family homes in our area as the bottom end is appearing to start at $650,000 — if you can find it.
Santa Barbara wasn’t the only county hit by FHA’s recalculation of its loan limits. More than 650 counties nationwide had substantial decreases in their FHA-insured loan limits, adversely affecting first-time buyers throughout the nation. San Bernardino County, a fertile ground for entry-level home ownership, had its maximum loan amount cut 30 percent.
The good news is that a bipartisan bill, House Resolution 4208, has been introduced in Congress by California Reps. Gary Miller, Brad Sherman, Ken Calvert and Jerry McNerney that will repeal the loan limit decreases and prevent the FHA from decreasing the loan limits in the future.
Affordable mortgage financing is as important to our real estate market as it is to real estate markets throughout the nation.
— Ed Fuller is a real estate broker with San Roque Realty Inc. and president of the Santa Barbara Association of Realtors. Contact him at [email protected] or 805.687.1551. The opinions expressed are his own.