The good ol‘ folks in DC announced today that the maximum 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the all-mighty Enterprises) will remain at the 2007 level of $417,000 for one-unit properties for most of the U.S.
Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit.
Helloooooo people over there…with median home prices in the Bay Area running in the mid 6’s, that won’t help much. You can barely even find a condo here for $417,000! Yes, prices are falling in general, but not everywhere.
Here is the good news: In October, powers that be (Office of Federal Housing Enterprise Oversight) said it would leave the conforming loan limit at $417,000 in 2008, no matter how drastically prices declined in 2007. But if cumulative home-price declines in 2006, 2007 and 2008 exceeded 3 percent, the limit would be adjusted accordingly in 2009, OFHEO proposed. In addition, a bill approved by the House in May, HR 1427, would allow Fannie and Freddie to securitize loans up to $625,000 in areas where the median home price exceeds the conforming loan limit.
Is this really good news? Let’s listen to the market and see.