Guest Author: Brian Hall – Vice President, MTH Mortgage

Congress raised the FHA’s loan limits a couple months back, which is really good news for home buyers. It makes the easier credit- and income-qualifying standards of the FHA program available to the majority of new home buyers. The standards for qualifying for an FHA loan are far more relaxed than its Fannie Mae and Freddie Mac counterparts – which opens the program up to qualified homebuyers who otherwise wouldn’t be able to take advantage of the lower 3.5 percent down payment.

Since that loan limit covers most of the new home prices in the market today, Congress’s act creates a powerful mechanism that’s poised to significantly stimulate the economy and help housing recover — and, in turn, help the overall economy recover. The Administration is also joining in the chorus on getting the housing market moving — and along with Congress and the Federal Reserve, they are working on multiple programs that will help stimulate residential real estate. The FHA loan limits are a good example of how the government can add some additional momentum to an improving housing market.

With these higher loan limits set to last through 2012 and interest rates at the lowest point on record, we now have a pretty favorable environment for home buyers through at least the next part of the cycle, and probably much longer.

It’s truly a great time to buy a brand-new home with a small down payment. Now is the time to take advantage of historically low interest rates and the low monthly payments that come with them.

The limit’s been raised. Are you in?