As a part of the stimulus plan enacted by Congress and Signed by President Bush last month (see my blog entry on the economic stimulus program) the mortgage limits for Fannie Mae, Freddie Mac and FHA loan programs will increase for the rest of 2008.As a result of the problems facing the housing industry and the sub prime mortgage crisis, jumbo mortgages (those greater than $417,000) have been harder to get and much more expensive. Traditionally, jumbo mortgages have used similar underwriting standards and were priced approximately .25% - .50% above conventional mortgages. Now, the underwriting standards are so tight that many people are unable to afford these types of loans. Additionally, jumbo loans have been as much as 1.5% higher than conventional mortgages making the much less affordable.
Loan limits for a single family home will increase from $417,000 to $729,750 or 125% of the median house price in the area. FHA limits will also increase. The current basic standard mortgage limits for FHA insured loans will increase from $200,160 to $271,050 (with limits up to $729,725 in the highest cost areas). Limits for 2 – 4 unit properties were also increased.
These mortgage limit increases are expected to help the beleaguered housing industry. It will make mortgages more attainable and affordable for more Americans. It will also allow more people to refinance their current mortgages to more favorable terms and rates and hopefully cut down on the mortgage defaults and foreclosures which hit record levels lately.
Check back for more information as to the actual mortgage limits you can expect for your area. As soon as I know them I will post them to this blog.
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