This is big boost from the Federal Government to help our market. We’ve been seeing quite a difference in the rates between conforming and non-conforming “Jumbo” loans. This measure is another reason it’s a great time to buy!
House OKs Lift on Fannie, Freddie Loan Limits
The economic stimulus package hammered out between the White House and Congress on Thursday lifts the size of home loans that may be bought or insured by Fannie Mae and Freddie Mac.
The Fannie/Freddie cap would rise to $729,750 for one year. Currently Fannie and Freddie are capped at $417,000.
The measure also would permit the Federal Housing Administration to indefinitely insure loans up to that same level. Currently, FHA loans may not exceed $367,000.
“The stimulus package announced today is a positive step toward strengthening the housing market and our economy,” NAR President Dick Gaylord said in a public statement. “The increase in loan limits should provide liquidity to the mortgage market in all parts of the country allowing qualified home buyers who may have been on the sidelines to enter the market.”
The measure is also expected to make jumbo loans more affordable because it will make them more attractive to investors, who since summer have shunned home loans that don’t pass through Freddie or Fannie.
“In high-cost states, many home buyers with good credit could save $3,000 to $5,000 per year by not being forced into the current jumbo mortgage market,” Gaylord said. “Currently, only families in lower cost areas are able to qualify for these types of affordable loans. Such a move would stimulate home sales and help stem the rise in foreclosures, reducing the number of foreclosures by as much as 210,000.”
In particular, prospective home buyers in costly regions like California, Northern Virginia, and New York have faced higher mortgage rates and tougher loan terms, and those areas would get relief under the plan, says Susan Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania.
“This is meaningful because the mortgage crisis and meltdown is geographically concentrated,” she says. “This response will assist the stressed areas.”
Source: Reuters, Patrick Rucker (01/24/08) and REALTOR Magazine Online
January 27th, 2008 at 11:55 pm
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January 28th, 2008 at 12:05 am
[…] unknown wrote an interesting post today onHere’s a quick excerptIn particular, prospective home buyers in costly regions like California, Northern Virginia, and New York have faced higher mortgage rates and tougher loan terms, and those areas would get relief under the plan, says Susan Wachter, … […]
January 28th, 2008 at 12:05 am
[…] lorainmoritz wrote an interesting post today onHere’s a quick excerpt“This is meaningful because the mortgage crisis and meltdown is geographically concentrated,” she says. “This response will assist the stressed areas.” Source: Reuters, Patrick Rucker (01/24/08) and REALTOR Magazine Online. […]
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January 28th, 2008 at 1:10 am
[…] Brian Brady wrote an interesting post today onHere’s a quick excerpt“The increase in loan limits should provide liquidity to the mortgage market in all parts of the country allowing qualified home buyers who may have been on the sidelines to enter the market.” The measure is also expected to make jumbo … […]
January 28th, 2008 at 2:06 am
[…] homequitybuilder wrote an interesting post today onHere’s a quick excerptThe economic stimulus package hammered out between the White House and Congress on Thursday lifts the size of home loans that may be bought or insured by Fannie Mae and Freddie Mac. The Fannie/Freddie cap would rise to $729750 for one … […]
January 28th, 2008 at 2:18 am
[…] unknown wrote an interesting post today onHere’s a quick excerptThe economic stimulus package hammered out between the White House and Congress on Thursday lifts the size of home loans that may be bought or insured by Fannie Mae and Freddie Mac. The Fannie/Freddie cap would rise to $729750 for one … […]
January 28th, 2008 at 2:31 am
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January 28th, 2008 at 9:29 am
[…] unknown wrote an interesting post today onHere’s a quick excerptIn particular, prospective home buyers in costly regions like California, Northern Virginia, and New York have faced higher mortgage rates and tougher loan terms, and those areas would get relief under the plan, says Susan Wachter, … […]
January 28th, 2008 at 3:25 pm
Great post. Thanks.