On Friday, December 17, 2007, the Senate passed a bill (93-1) to increase the maximum FHA loan amount to $417,000 for a single family residence. The current limit is $362,000. 

This loan amount matches the current conforming loan amount for conventional loans.  This will give some homeowners struggling with a decline in value the opportunity to refinance their current loans into a more stable FHA loan.

It also opens up the market to many home buyers who are unable to come up with the 10% down required by many lenders in order to purchase a home. There are, of course, first time home buyer programs that allow for 100% financing, but FHA is typically more forgiving when it comes to credit history and income requirements.

This is wonderful news in that it is a solid effort to help Borrowers become home owners or to keep the home they have.

The Bill has some provisions to be worked out prior to being sent to the President for signature.