President Obama announced on January 8, 2015 in Phoenix, Arizona that the Federal Housing Administration (FHA) will reduce its mortgage insurance premium 0.5 basis points from 1.35% to .85%. This dramatic change will support a recently lagging housing market and keep FHA competitive with Fannie Mae and Freddie Mac who recently made 3% down loans available through conventional financing. This change will go into effect on home loans originated after January 26, 2015.

FHA insures loans made by private lenders and was severely impacted during the housing debacle. As a result of defaults, FHA has raised the mortgage insurance premium 3 times since 2008. However, better market conditions have seen a recovery sufficient enough to question whether current buyers should keep paying inflated rates for those who defaulted formerly.

FHA mortgages are a great way for a buyer to get into a home or investment property with little down payment. The loan lending limits are different per county (based on average home prices) but the highest counties in California currently have the following limits:

  • 3.5% down payment loan on a single family home up to a $625,500 max loan amount
  • 3.5% down payment loan on a duplex up to a $800,775 loan amount
  • 3.5% down payment loan on a triplex up to a $967,950 loan amount
  • 3.5% down payment loan on a 4-plex up to a $1,202,925 loan amount

For more information, call Mike 1 800 239 1103 or email