Conforming Loan Limits Will Remain the Same in 2008
Fannie Mae's conforming loan limits for single-family homes will remain at $417,000 for 2008 ($625,500 for Alaska and Hawaii). This is the second year in a row that the limit has not changed.
Loans that are higher than the conforming limits are referred to as "jumbo" loans and typically carry an interest rate that is one-quarter to one-half percent higher than conforming loans.
The conforming loan limit reflects "average" change in housing prices across the nation as calculated by the Office of Federal Housing Enterprise Oversight (OFHEO); however, it's well known that all real estate is local. For example, in the San Francisco Bay area of California, over 60 percent of home loans closed in early 2007 were jumbo loans, while nationally, jumbo loans accounted for about 16 percent of home purchases.2
This year, OFHEO said that despite the decline in home prices during the past year, any decline in the loan limit would be deferred at least one year.
For further information, contact your Mortgage Advisor.
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