News out of the government seems to indicate that they will be extending the temporary loan limits for conventional and FHA loans through 2010. This is great news as right now there are very few investors buying loans over the conforming loan limit of $417,000. As I mentioned the other day it also appears the extension of the home buying tax credit is closer to being a done deal. No word yet on exactly how long the tax credit will last or if it will be opened up to all buyers and not just 1st timers.
How Does This Affect Us As Realtors?
This is all good news. Remember that Fannie Mae and Freddie Mac buy loans and set underwriting guidelines for loan amounts up to and including $417,000. Loan amounts over that amount are considered "Jumbo" loans and are sold to "other" investors. Right now the "other" investors do not really exist. Part of the Stimulus Package caused a temporary increase in the conforming loan limits. In LA/Orange Counties the new conforming limit is $729,750 and these temporary limits were set to expire at the end of this year. News that the government will be extending these limits through 2010 is huge news. It appears that FHA loan limits will also be extended.
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I hope they don't pass some of the other parts of that bill but I think this part will go through. All indications point toward this being done by the end of this week or early next week. It's just some time for the everyone else thats been dragging their feet to get off the fence and buy.