With the President's signing of the economic stimulus bill, more details have emerged.

The bill sets the FHA and conforming Fannie Mae/Freddie Mac loan limits to the lesser of $729,750 or 125% of an area's median home sales price. If 125% of an area's median home sales price is below the current conforming loan limit of $417,000, the $417,000 limit still applies. The area median home price is determined by HUD and is based, in part, on the National Association of Realtors data for each MSA.

The FHA and conforming limit changes are temporary and are set to expire on Dec 31, 2008.

The new limits will apply to 30 year and 15 year fixed rate, fully amortizing and owner occupied only.

How will it affect us here in Idaho?

For conforming, not much, the 125% of median price will leave us under the current $417,000 limit.

FHA limits will increase slightly.  Good new for Reverse Mortgage clients and FHA refi clients.  For Purchase clients, they can buy a more expensive home, but Idaho Housing already has sales price limits that exceed the expected FHA limits.

Nationwide, the increased limits will affect only about 20 or so higher cost areas.  I'm told only 6 areas will probably get the full increase.  It appears that maybe 15% of otherwise jumbo loans would qualify for this.

The pricing and final guidelines are being established by Fannie Mae, and Freddie Mac.  Its unclear what the pricing will be and what kind of mortgage rates we'll see once they're published. 

Hopefully, the program will provide much needed relief for homeowners in those high cost areas.  We should encourage congress to extend those past 2008.