Watch Out For Loan Limit Changes When Crossing County Lines
We recently had an FHA approved buyer cross the bridge from Contra Costa County to Solano County to make a $600,000 FHA offer on a property.
This price would have been no issue in Contra Costa County, but Solano County’s FHA Loan Limit is only $550,8500 and the buyer only qualified for FHA financing.
As a result, she had to withdraw her bid.
In high-end counties, like Alameda, Contra Costa, Los Angeles, and Santa Clara, most people know that both max FHA and Conforming Loan limits are $822,375 (for One-Unit Residences).
Loan limits are the maximum loan amount that FHA and Fannie and Freddie can offer in a particular county. The limits are based on median home prices in the county.
If buyers want to purchase outside the loan limit, they will need to obtain Jumbo financing, come up with a larger down payment or use 1st/2nd combo financing to cover cash shortfalls (if they qualify).
Two important reminders: (1) Loan limits often drop significantly as you travel away from high-end metro areas; and (2) FHA and Conforming loan limits do not always match.
If you are leaving one county for another to make an offer on a property, it is essential to check the loan limits.
Here are some loan limits for some key inland counties:
**Conforming and FHA Loan Limits do not match.
Here is a great link to check all loan limits in CA: California FHA and Conventional Loan Limits by County
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