WASHINGTON — The government Wednesday raised the maximum for mortgages in 14 high-cost California counties that could be guaranteed by the Federal Housing Administration to $729,750 from $362,790.
The temporary increases announced by the Department of Housing and Urban Development are part of a recently enacted economic stimulus package and are intended to let more homeowners with high-rate mortgages refinance into government-insured loans.
The department is expected to raise FHA limits in other counties nationwide in the coming days.
The stimulus legislation also includes a temporary boost, to $729,750 from $417,000, in the cap on loans that government-sponsored mortgage giants Fannie Mae and Freddie Mac can buy or guarantee.
The California counties at the new maximum level for FHA loans are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz and Ventura.
Gov. Arnold Schwarzenegger said the new limits would "help California's housing market rebound."
"No other state has been more impacted by the ongoing mortgage crisis than California," he said in a statement, "and the announcement today . . . will help more working Californians achieve the American dream of homeownership through less expensive and more secure loans."
The FHA, part of HUD, insures mortgages for low- and middle-income borrowers.
HUD Secretary Alphonso Jackson, appearing in Los Angeles on Wednesday, said the higher limits would make FHA-backed loans available to as many as 250,000 homeowners nationwide, including 30,000 Californians.