The Daily Ramble: Fannie Mae Loan Limits Extended To December 31, 2010!
The impending reversion of the Fannie Mae, Freddie Mac and FHA loan limits back to the old $417,000 conforming loan limit at the end of the year has been postponed to December 2010!
In January 2009 the loan limit had been increased in Westchester (considered a ‘high cost’ area) to $729,750. Above this level are ‘jumbo loans” which carry higher interest rates and larger down payments. The old limit of $417,000 was damaging to the Westchester market as it effectively increased financing costs for the majority of sales and would have stifled the stabilizing Westchester’s real estate market.
Combined with the likely extension and possible enhancement of the first time home buyer program this is wonderful news for buyers! Fold in the continued historically low interest rates and what are you waiting for??
The Chairman of the Mortgage Banking Association (MBA) Robert E. Story, Jr. issued the following statement:
“Given the lack of a private secondary mortgage market, FHA, Fannie Mae and Freddie Mac are pretty much the only game in town. Extending the current loan limits through 2010 will allow more loans to qualify for these important programs and will help keep mortgage credit more accessible and affordable for qualified borrowers.
“As we try to maintain the momentum of the housing recovery, providing affordable financing for qualified borrowers is critical. Extending the loan limits, along with other initiatives such as extending and expanding the homebuyer tax credit, will help restore stability to the housing and mortgage markets.”
