The Mecury News reports that a "nearly extinct" mortgage loan is now reappearing in the Silicon Valley - the FHA loan. For many years, the FHA loan limit was too low for many buyers to use in high-cost real estate areas such as the San Francisco Bay Area. The passage of the economic stimulus package by Congress in February raised the FHA loan limit in the San Francisco Metro Area to $729,750. As a result, it has become an excellent option for many home buyers.
Lenders and brokers are reporting both an increase in applications for purchase loans as well as refinancing from more expensive adjustable rate products.
The number of FHA loans in the San Francisco Metro Area during January through April 2008 has increased to a total of 112 mortgages from a total of just 13 mortgages during the same months in 2007.