New Temp Metro FHA Mortgage Limits: It's Not Rocket Science--I Project New Portland Metro FHA Limit Exceeding $400k.

Todays Oregonian Real Estate Section has Inman News story which could leave impression that setting new temporary FHA mortgage limits is going to be difficult for the metro areas in the country who will be able to use the new 125% of median sales price standard. (Inman is subscription site, and story doesn't appear to be on Oregonlive site, hence no link to story).

With data sources now available nationally, and close working HUD relationship with local multiple listing services, it's not going to be difficult at all and I am sure that HUD will get it done by March 14th deadline with little problem.

Let's take Portland Metro Area as an example.

1. Current FHA limit (95% of median sales price ) is stated in the story as $304,950.
2. With simple division the median sales price used to set the current mortgage limit was $321,000, ($304,950/95%), substantially exceeding the $216,840 limit required to temporary use the 125% of median sales price standard in a metro area.
3. Applying 125% to current median sales price of $321,000, yields a likely new temporary FHA loan limit of $401,250 for the Portland metro area.

Caveat :
This $401,250 projected median sales price maximum mortgage could slide up or down for a couple of reasons.

1. IF HUD decides to use a uniform national data source for metro median sales prices (possible but unlikely).
2. IF the median sales price for any county in the Portland metro area is now higher than $321,000, this could increase the temporary FHA mortgage limit. (As it should be, the HUD/FHA practice has been to use the highest median sales price of any county within a metro area).

P.S. If new Portland FHA limit turns out to be substantially different than my projection, I will try to remember to post why it was different, OR I will adopt a new resolution to not try to predict anything in the future.