In response to the uptick in Orange County home prices, buyers can now take out bigger mortgages. As of January 2017, both the conventional and FHA loan limits are higher in the O.C., which is considered a “high cost” area. If those mortgage options aren’t enough, you can always turn to a jumbo loan to cover the costs.
Conventional loan limits in Orange County
A conventional loan is one that is not backed by the government, like an FHA or VA loan. They are originated and insured within the private sector. Within the conventional loan category, there is what is known as a “conforming loan.” This is a type of loan that falls within the maximum size limits used by Freddie Mac and Fannie Mae and the caps are established by the Federal Housing Finance Agency. A loan that falls outside the conforming loan limit is considered a jumbo loan and cannot be sold in the secondary mortgage market.
Currently, the conventional, conforming loan limits in Orange County for 2017 are:
- $636,150 for a one unit/single-family home
- $814,500 for a two-unit home
- $984,525 for a three-unit home
- $1,223,475 for a four-unit home
Most standard buyers fit into the “single-family home” category, unless you are a real estate investor or someone who is buying properties with the intent to rent them out. At this time, it’s unsure of whether or not the limits will continue to increase in 2018.
FHA loan limits in the O.C.
Many buyers opt for an FHA loan rather than a conventional loan for a few very good reasons. They are insured by the Federal Housing Administration, which requires borrowers to pay for mortgage insurance. This protects the lender from a loss in case the borrower defaults on the loan. Usually, with an FHA loan, there are less stringent lending requirements, more attractive interest rates, and lower down payments required. It’s easier for people with less than perfect credit to acquire an FHA loan.
The loan limits for an FHA mortgage are the same as a conventional mortgage. So, buyers interested in purchasing a single-family home are maxed out at $636,150 (which is an increase over the former max of $625,0000). The largest FHA loan you can get is $1,223,475 for a “four-plex.”
If $636,150 isn’t enough for you, research the parameters of a jumbo loan.
Shop for a mortgage with Global Point Relocation’s help
If you’re relocating to Irvine, Laguna Beach, or anywhere in the Orange County area, enlist the assistance of Global Point Relocation. We’ll help you find the right mortgage broker who will secure the perfect loan for you—all while getting you into your family’s dream home. Call us today at (562) 221-0055 to learn more.