Q&A Economic Stimulus Act and FHA Loans

Question: I've been hearing a lot about the Economic Stimulus Act of 2008. One section mentioned that the limits for FHA loans have been raised in some areas. Can you tell me more about this?

Answer: The Economic Stimulus Act was signed into law in February 2008. It temporarily increased loan limits for FHA fixed rate mortgages above the standard or "conventional" limit of $417,000.
The reason for this increase was to make home ownership more affordable in high cost areas where housing is particularly expensive. California and Hawaii are two states with FHA designated high-cost areas.
If you're planning to buy a home in a high cost area this year, or are considering refinancing your adjustable rate mortgage , these "FHA Jumbo" loans could save you a considerable amount of money. This is because FHA loans generally offer low interest rates than non-FHA loans. You'll also enjoy lasting peace of mind, as the loans fixed rate won't go up for the life of the loan. And if you're buying a home, you can take advantage of FHA loans' down payment options.
This temporary increase expires December 31, 2008, so contact me today to find out more.

source: Andrew Becher, MetLife Home Loans