Straight Up Chicago Investor Podcast Episode #185 - All You Must Know About The New FHA Limits
GC Realty & Development's real estate podcast, Straight Up Chicago Investor, sat down with Chris Puleo, Producing Area Manager of The Puleo Group, to talk about the hot topic of FHA limits being increased effective January 1, 2023. With property values rapidly rising over the last few years the Federal Housing Administration is raising lending limits to keep pace with home price inflation.
ROSELLE, Ill., Dec. 28, 2022 /PRNewswire-PRWeb/ -- Mark Ainley & Tom Shallcross sat down with Chris Puleo, Producing Area Manager of The Puleo Group to talk about the hot topic of FHA limits being increased effective January 1, 2023. With property values rapidly rising over the last few years the Federal Housing Administration is raising lending limits to keep pace with home price inflation.
The Federal Housing Administration (FHA) helps first-time homebuyers and those with low to moderate incomes purchase a home. FHA loans are insured by the government and offer many benefits, such as lower down payment requirements and more lenient credit standards.
What Chicago Investors Need to Know About the Updated FHA Limits with Chris Puleo
The Federal Housing Administration (FHA) adjusts these limits annually based on local housing markets. Loan limits may be higher or lower than the standard amount depending on your area. Remember that FHA loan limits are just one of the factors that lenders consider when reviewing your loan application. Other criteria include credit score, debt-to-income ratio, and down payment size. Understanding the FHA loan limits in 2023 is essential in the home-buying process. With this knowledge, you'll be better equipped to decide whether an FHA loan is the right fit for you.
Questions We Answer In this Show:
Q. What is the FHA Self Sufficiency Test?
A. On 1 and 2 unit properties in Chicago, the self sufficiency test does not apply, however on 3 and 4 unit properties the test does apply. You take ALL unit market rents, or current rents (whichever is lower) multiply it by 75% and that is the max mortgage payment you can have which then dictates the down payment.
Q. Can I still put 3.5% down on 1 and 2 unit buildings in Chicago?
A. On 1 and 2 unit FHA purchases you can put 3.5% down but on 3 and 4 unit properties you can only if that payment passes the self sufficiency test. If it does not then the max loan amount would be calculated.
Q. Are 3 unit buildings in Chicago harder to pass the self sufficiency test then 2 or 4 unit buildings?
A. Yes. This really is dictated by the market. The Illinois market, due to high real estate taxes, makes it more difficult on a 3 unit. Basically in Illinois. or other states with high tax rates, one unit's rent just covers the taxes in the test making it more difficult. In states that have more controlled real estate taxes 3 units are much easier to obtain lower down payment FHA financing.
Q. Would it be smart to take a cash out refinance right now if I still live in my multi unit?
A. Maybe. There is market equity from the past couple years so it is actually a great time to take cash out even to sit on for your next investment. This way you have options in 6 months to either use conventional financing or refinance as rates come down. If you don't want cash out, realize you cannot have two FHA loans at once, so even though rates may be higher, if it is about down payment on your next hack, you really need to convert your FHA loan to conventional. So there are a number of reasons to discuss whether or not you should refinance with me.
Q. Does mailto:[email protected] [The Puleo Group __title__ null] lend in other states outside of Illinois?
A. Yes, Our company is licensed in 44 states currently and I am either licensed or have licensing pending in over 30 states so I can take care of 98% of the clients on this podcast.
Q. How can I get a hold of Chris Puleo from The Puleo Group to discuss more about how this can help me?
A. Multiple ways but my cell phone is always available at 630-742-3198 or my email at [email protected]. You can also find me on Facebook, Snap, and Tic Tok at handle @cpuleo9710, also visit my web site at http://www.thepuleogroup.com
About GC Realty & Development, LLC
As Chicago's Responsive Property Manager™, GC Realty & Development, LLC provides its clients unparalleled service through full-service property management and brokerage, including tenant placement, screening, rent collection and ongoing maintenance. Focused on responsiveness, GC Realty & Development, LLC ensures clients experience hassle-free rental property ownership by maintaining client privacy and handling daily operations for rental units. Learn more at http://www.gcrealtyinc.com.
MEDIA CONTACT: Mark Ainley 630-781-6744 [email protected]
Media Contact
Mark Ainley, GC Realty & Development LLC, 1 6307816744, [email protected]
SOURCE GC Realty & Development LLC
Share this article