A new FHA loan limit — $106,000 higher than before — is making these low-money-down loans a vital new force in Southwest Florida's staggering real estate market, area lenders say.

But a separate, much-ballyhooed bump in lending limits -- so-called "jumbo loans" -- pushed through in February by Congress as part of its economic stimulus package is having little or no impact in a market plagued by falling prices and rising foreclosures.

The new higher limits on Federal Housing Administration mortgages are only for those who plan to occupy the properties they are buying or refinancing.

But once past that limitation, the loans are proving to be very competitive. They are virtually the only loans on the market that can be assumed by a new owner at the old rate, which could turn into a real plus if and when the nation gets into a higher-interest-rate environment.

"I think the biggest lift we got was the FHA part," said Frank Fontanetta, president of Sarasota's Sentinel Mortgage. "We are doing more and more each month."

Fontanetta noted that because of the bureaucratic complexities that had been inherent in FHA loans for decades, many real estate agents shy away from them.

But "FHA has made the product so user-friendly it is as quick today to get an FHA as a Fannie Mae," Fontanetta said.

Bob Stobaugh of CNL Bank in Sarasota is also high on the newly dressed-out FHA loans.

"It's for primary residences only, so this is not going to bail out the guy who has two-three-four properties," said Stobaugh, also president of the Gulf Coast Mortgage Bankers Association. "But for somebody whose rate is going to adjust this year, you can get in today at 61/4 percent fixed."

Mike Koebel, who is the FHA expert at the local CNL Bank, said that looking at the March sales statistics for the region, "about 90 percent of the loans in the Sarasota market would fall within that new FHA limit."

"It doesn't take a whole lot of looking at the numbers to see that FHA is the way to go," Koebel said.

Unlike a 95 percent conforming loan, now tough to get from lenders who have suddenly become much more conservative, a 97 percent loan-to-value FHA loan is relatively easy to get.

"The FHA financing today is really the new subprime -- with 3 percent down and maybe some credit blemishes," Fontanetta said.

FHA offerings also include a loan for someone who wants to finance a cosmetic rehabilitation of a house as part of the first mortgage, and others for those who wish to invest in a duplex, tri-plex or four-plex.

"If you are an investor and you want to buy a four-plex, you'd most likely have to put 30 percent down for a Fannie Mae loan," Fontanetta said, adding that if the same investor decided to live in one of the units and go for an FHA loan, he or she could buy the property for 3 percent down.

"You can actually use the rent for the three units you are going to rent to qualify for the loan."

No benefit

The boost to jumbo loans was held out by politicians and government officials as a balm for the housing market that would spur spending and lessen the likelihood of a recession.

The government-sponsored mortgage entities Fannie Mae and Freddie Mac gave a modest $25,500 boost in the conforming loan limits to $442,500 for the Sarasota-Bradenton market.

But almost simultaneously, these loans became much tougher and more expensive to get, lenders say.

Fannie Mae and Freddie Mac and the companies that issue loan guarantees have instituted extra fees based on credit scores. To cope with the new category of conforming loans from $417,000 to the new top-end, those entities have basically created a new rate category that is slightly cheaper than a jumbo loan but costs more than a conforming loan. So says Penny Hill, who runs Chase's Sarasota office and who has been that company's top performer nationally in mortgage production for nearly a decade.

"You've got conforming, and something we could call 'super-conforming,' and then jumbos," Hill said.

Hill, who most of the time is acting directly to funnel loan money from Chase, based in New York, to borrowers, says she has plenty of money to lend to those who qualify.

"If somebody can afford a home, we have a loan for them," Hill said. "The difference from before is that credit standards have tightened to the point where somebody has to be able to afford the home."

What Fannie Mae did under Congress's direction was to go from a national loan limit of $417,000 to higher localized limits based on median home prices. That skewed the results to the point where some pockets of the nation with very home prices, such as San Francisco and Key West, have new Fannie Mae conforming loan limits in the low $700,000s.

"In Florida, only seven counties were affected at all," said Hill, noting that the ultra-wealthy city of Naples in Collier County saw its Fannie Mae limit climb to $531,250.

That contrasts starkly with the impact in this region.

"I am sure

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