On Tuesday President Bush signed a $168 billion economic stimulus package intended to provide “booster shot” for the economy. Included in the plan are approximately $117 billion in rebate checks and tax breaks for businesses as well as an increase in the FHA loan limit.
The increase in the loan limit is meant to help the sagging subprime housing market, which has taken substantial hits in recent months due to the fallout of predatory lending practices of many lenders. By increasing the loan limit FHA loans become a viable option for potential borrowers in high cost areas.
Previous to the bill's signing the FHA loan limit was around $200,000 to $360,000 depending on the area. Now borrowers in high cost areas will be able to take advantage of FHA loans as high as $729,750, a substantial increase. Rebate checks are expected to begin being sent in May in order to boost third and fourth quarter spending.
Rebates will be as high as $600 slightly less for those making more than $75,000 a year.