The House has flipped and agreed to increase the loan limits for Fannie and Freddie. The increase is to be temporary until the end of the year and got traction because the jumbo loan market continues to be soft with rates for jumbos 50 to 75 basis points higher than conforming limits. As it is being structured, the limits will increase by 125% of the median home price in any market area to a max of $750,000. It was initially reported that the limit would go to $625K across the board.
According to a report on CNBC, Rep. Barney Frank's Finance Committee will soon release the details. Levels may be set based upon local housing markets. This would make sense considering home prices are much higher in places like California and New York as compared to Michigan or Texas.
Why is this important? Jumbo loan interest rate have been nearly 1.5% higher in some case than conforming rates. Your $550,000 could cost $400 a month less after this change.
The real estate market will bounce back(to normal pre-2003). With rates being very low, seller and buyers expectations becoming more realistic and now conforming limits increasing, this is exactly the lift we all need.
Nick Porter
nick@cffinfo.com
www.lawenforcement1st.com
Community First Financial, LLC
7575 E Redfield Rd, Suite 235
Scottsdale, AZ 85260
480-305-8900 Ext: 308
541-231-3040 Cell
480-718-8802 Fax
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