New FHA and Fannie Mae Loan Limits for 2008
We have been waiting for some relief to our current market conditions and it arrived yesturday, March 6th. The new FHA and Fannie Mae, Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development. The new limits in our area rise to $729,750.
What does this mean? Previously $417,000 loan amounts were the cutoff point between conforming and jumbo loan limits. Rates on jumbo loans were about 0.25 percentage point higher than those on smaller loans and now with credit tighter jumbo rates are as much as a percentage point higher. Allowing bigger loans will likely encourage lenders to drop interest rates for loans over $417,000.
The National Association of Realtors research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market by providing an immediate infusion of much needed liquidity to the nation's mortage market.
This increases are set to expire Dec. 31st.