Gabe's Blog

I wanted to share some information with you, as I have been receiving many questions surrounding the pending changes to Agency (aka Conforming) & FHA Mortgage Limits. In the summary below you will find the information I know so far. Additional loan limit details from the agencies (Fannie Mae and Freddie Mac) is anticipated in mid-November 2008. I will communicate these changes to you as they become available.

Summary:

The Housing & Economic Recovery Act of 2008 (HERA) outlines the following:

The Agency (GSE) loan limit cannot decline below the current limit of $417,000

The FHA loan limit floor will not decrease below $271,050 (or 65% of the GSE nationwide limit)

The 2009 Loan Limit Calculation for both Agency Jumbo & FHA Jumbo loans in high cost areas will be calculated at 115% of the Median Sales Price (down from the 2008 calculation of 125%)

The 2009 Maximum Loan Amount is anticipated to be $625,500 or 150% of the GSE nationwide limit allowance (down from the 2008 maximum of $729,750 or 175% of the GSE limits)

See the below sections for specific details on the Agency & FHA Jumbo Changes:

Agency Changes:

Current - 2008 Agency Jumbo Economic Stimulus Limits

Floor : 1-Unit: $417,000

Loan Limit Calculation : 125% of Median Sales Price

Maximum Loan Amount : 1-Unit: $729,750

Proposed - 2009 HERA (Housing and Economic Recovery Act) Agency Jumbo Limits

Floor : 1-Unit: $417,000 (No change)

Loan Limit Calculation : 115% of the Median Sales Price (down from 125%)

Actual 2009 HERA Jumbo Loan Limits and Guidelines will be communicated when they are received from the agencies (expected mid-November 2008)

Maximum Loan Amount : Anticipated to be $625,500 (down from $729,750)

I hope this information helps clarify what the Conforming loan and FHA loan limits are expected to be starting January 1, 2009. As always, please let me know if you have any questions at all and if there is anything that I can do to assist you with your home financing.

Thanks,

Gabe

408-426-4416