The number one search term bringing people to my website over the past three weeks has definitely been “Congress raising conforming loan limit”. (This is unfortunate; I wish it had been, “how can I spend my idle cash on buying residential real estate in Boston”, instead.)
My site (oddly) shows up on page 1 on Google, if you do a search on the term (I’m #3!).
Well, I’m doing my part to help everyone learn about this important subject.
Basically, by cutting & pasting from the #2 story on Google, courtesy of Inman News.
Here’s all you need to know about conforming loan limits and what it means to you, in case you’re in the market for a home loan or planning on refinancing:
In high-cost markets, the $417,000 conforming loan limit for loans eligible for purchase or guarantee by Fannie and Freddie will be raised to 125 percent of the median home price, with an upper cap of $729,750. That formula means that the $417,000 conforming loan limit will remain in place in markets where the median home price is $333,600 or less …
The temporary increase in the conforming loan limit is likely to have a bigger impact on FHA loan guarantee programs, because the current limits for FHA are lower … [t]he new ceiling for FHA loan programs in normal markets will be $271,050 …
In areas where the median home price is above $216,840, the limit for FHA loan programs will be 125 percent of the median home price, all the way up to $729,750.
Fannie and Freddie will be allowed to buy and securitize jumbo loans originated any time between July 1, 2007 and Dec. 31, 2008. That means jumbo lenders may be able to sell some of the loans they’ve made in the last seven months to Fannie and Freddie, freeing them up to make more loans.
Regarding Boston, here’s what may happen, once the agencies come up with lending guidelines:
Median home price, 3rd-quarter, 2007: $414,700
New conforming loan limit: $518,375 (from the $417,000 limit, currently in place)
Source: Raising conforming loan limit not a simple task; Fannie, Freddie may have to tiptoe into ‘jumbo light’ market – By Matt Carter, Inman News