We all know about the recent legislation that just passed that would raise loan limits on conforming and FHA loans. I have done some research on the law and the news mixed for Alabama.

Fannie and Freddie will only be raising their conforming limit in "high cost areas". This means the median home price must exceed $334,000. We are no where near that in Alabama. Only the extremely expensive areas in CA, NY, and FL will see any increases. I don't believe pricing on Jumbo loans will be coming down anytime soon, and this will continue to put strain on markets with more expensive homes.

FHA, however, will see an increase. According to the website Alabama is in a low cost area, so the FHA limits will go from 48% of the conforming limit of $417,000 to 65% of the conforming limt. This means that FHA limits will go from $200,160 to $271,050 for a single family unit. The pending legislation also would reform the mandatory 3% down to offer more "flexible" down payment options. This could also mean refinances of 99 or 100% LTV instead of the current 97%.

Stay tuned!