The Federal Housing Administration (FHA) announced that effective January 1, 2000, loan limits for their 1-4 family mortgage programs have increased. Locally all counties, with the exception of Ocean, raised their ceilings to accommodate the change.

Unlike the Veteran's Administration, Fannie Mae and Freddie Mac, FHA home mortgage loan caps are based on a county by county determination throughout the country. The maximum loan the government will insure in one county may be thousands of dollars lower in a neighboring county for the same type of home. Opposition by many groups, including the Mortgage Bankers Association, have found this method to be discriminatory as well as confusing. Many experts feel that is only a matter of time before FHA also implements standard limits throughout the country, regardless of county income and home sales averages.

Atlantic and Cape May Counties registered the most significant increase to $161,500, up from $153,900 for a single family unit. Cumberland's limit went to $121,296, up from $115,200. Burlington, Camden, Gloucester and Salem counties increased $2,400 to $156,750, up from $154,350. Ocean County remained at $170,362.

Given FHA's regulations regarding downpayment and total dollars needed to purchase a home, the affordability factor now includes those people looking for homes in the $165,000 price range. With a Seller's contribution to Buyer's closing cost, a purchaser short of cash will now need only $4800.00 to purchase a home for $160,000. In a lower price range, the same principle exist. With a Seller contribution to a Buyer's closing cost, a purchaser would need only $3300.00 to buy a home for $110,000. Of course to qualify for this type of program, credit worthiness and the ability to make timely payments will play a big role in the approval process.

With interest rate around the 8% range, there isn't a better time to see your Realtor and seriously consider buying that home.