FHA Raises Limit on Mortgages by 7.8%

The Federal Housing Administration raised by 7.8% the limit on the size of home mortgages it insures, a support for the entry-level segment of the real estate market.

The FHA will insure single-family home mortgages of as much as to $172,632 in low-cost areas of the country such as Texas and as much as $312,895 in areas such as California where real estate prices have soared.

The new limit for 2005 is part of an annual adjustment that the Department of Housing and Urban Development makes to account for rising prices.