Hope Now, the housing assistance coalition, has assisted more than one million households struggling with foreclosure. It’s important to note that approximately 278,000 of these cases involved loan modifications. Modifying the terms of a mortgage loan can help homeowners maintain their payments by eliminating rapid rate increases, negative amortization and other “exotic” terms that can make it difficult for homeowners to make payments once the initial period of very low payments expires.

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In an effort to help homeowners, HUD is temporarily changing the FHA loan limits. Effective March 6, 2008, the new FHA loan limits range from $271,050 to $729,750. The new maximum amount of $729,750 will only be available in extremely high-cost metropolitan areas, for comparison, the previous limit in these areas was $362,790. Use this interactive map to view the FHA loan limits in your area.

The temporarily increased FHA loan limits are part of the Economic Stimulus ACT of 2008 and are believed to help provide liquidity and stability in the volatile housing market in the US. These temporary increases are effective until January 2009 and then the limits will decrease to their previous amounts unless the U.S. Congress approves a legislation to permanently increase loan limits.

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