The Stimulus bill of 2008 enhanced FHA Loans to be able to accomodate more Homebuyers and also allow more Home Owners to Refinance.   FHA Loans are available in High Cost areas up to $729,750.   FHA Jumbo Loans allow you to purchase a home with as little as 3.5% downpayment, or refinance with 2.25% equity (97.75% LTV).  

FHA Jumbo Loans are also called FHA High Balance Loans.

Areas in Los Angeles, San Francisco, Alameda, Contra Costa, San Mateo, much of the Bay Area, Monterey, San Benito, Santa Barbara, Orange County, Ventura County, etc are eligible for FHA Jumbo Loans up to the full $729,750.   San Diego is eligible for FHA Jumbo Financing up to $697,500, and the Seattle area up to $567,500.

FHA Jumbo Loans offer many benefits:

• Low downpayment requirement - 3.5%
• More flexible credit guielines than conventional loans
• Allow you to combine a first and second mortgage into one FHA Jumbo with no penalties for cash out
• Higher loan amounts - up to $729,750  
• Fico Scores as low as 620 on FHA Jumbo Loans
• Affordable Mortgage Insurance (vs private mortgage insurance)
• Refinance options that Conventional loans do not offer (such as very low equity)

Check out the FHA Loan Limits for your County:

2012 FHA Loan limits for California