Higher Limits on Home Loans is Good News for Hawaii Buyers

Washington, D.C. -- The U.S. House of Representatives today approved the “Expanding American Homeownership Act of 2007,” which will help more homebuyers, especially first-time homebuyers, qualify for Federal Housing Authority (FHA) federally insured loans.

The legislation authorizes loans with lower or even no down payment for borrowers who can afford the mortgage payments but lack the cash for the down payment.  The law also increases the upper limit that can be borrowed, important in expensive housing markets like Hawaii.

“We have an affordable housing crisis in America — particularly in Hawaii where more and more people have simply been priced out of the market,” said Rep. Neil Abercrombie.  “This action is just a start.  But it makes the American dream of homeownership possible for a lot more people.”

In addition to lower down payments and higher loan limits, the legislation creates an Affordable Housing Fund with up to $300 million in excess profits earned by FHA from home loans each year; more than doubles Housing Counseling to help borrowers who are behind on mortgage payments; directs FHA to offer loans to higher-risk-but-qualified borrowers without fee hikes; and raises limits for FHA Multifamily Loans to help funding in high cost areas and help communities maintain affordable housing.

The Senate is expected to begin considering similar legislation later this week.

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