The limit for single family homes had been up to
About one-fifth of first time homebuyers in the area had been using FHA loans to pay for their homes. With many of the homes in the western part of the region in the range of
"The builders are worried because it takes people out of the market for their homes," Herrera said. "They've lost a segment out of the market of people who would have bought those homes."
An appeal letter, written by the
The letter says the new loan limit for the area was calculated below the reasonable cost of living in many of the largest communities of the Inland Empire. With FHA loans playing an important role in enabling African Americans and Latinos to purchase homes, the lower loan limits in the Inland Empire will significantly impact minorities' ability to own homes, according to the appeal letter.
"This is a very dramatic reduction with really no forewarning," Ferguson said. "Some people were caught midstream and had been pre-qualified as they were shopping for new homes. Now they can't qualify."
The change also affects other areas of the economy.
"When people buy a home," Ferguson said, "they have to buy appliances and furniture for those homes. Now to get over that threshold, they're going to have to put more money down, or get into loans that are harder to qualify for."
Lewis said the reduction places one more barrier for people buying houses.
"I mean it won't be disastrous for the housing market, but this makes it that much tougher for a lot of people," Lewis said. "It's not a good thing, but it won't be disastrous. People will still find a way to buy, but it might take longer."
Lewis, who is also in the business of developing apartment complexes, said the situation might help the apartment market a little bit "because people need shelter."
"It's good people are organizing," Lewis said. "It will be difficult to make them change, but it's worth trying."
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