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Florida Mortgages | New FNMA Loan Limits - What does it mean?

By Dustin R Burke, Adonai Financial

The Associated Press announced that federal regulators will allow Fannie Mae and Freddie Mac to raise loan limits on conforming loans to $729,750. Is this something we should be excited about? It sounds great, but there are several things we don’t know yet.

SunTrust Bank put out a statement today about what we know and who will see the increase:

What we know today (expect to see changes)

• The bill sets the FHA and conforming (FNMA/FHLMC) 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 still applies. You may not feel the benefits, but you will not be any worse off than you are today.

• The FHA and conforming limit changes are meant to be temporary and are set to expire on Dec 31, 2008 (unless extended – which is doubtful).

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

• ARMs are being considered, but if allowed, the increase will likely apply to one ARM type (forexample, 5/1s).

• FNMA will have other credit overlays including LTV limitations (probably 90% or less).

• The limits will be effective as soon as the bill is signed, FNMA determines pricing.

What do you think about the new conforming loan guidelines? Do you think it will help? Send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

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Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Posted by Dustin R. Burke on 02/27/2008 04:23 PM

Comments (1)

fnma, loan limits, mortgages

Post is included in group: FloridaLoanOfficers

1 Comments on Florida Mortgages | New FNMA Loan Limits - What does it mean?

FEB

2008

Yes. I had a buyer that I pre-approved at with 20% down and that brought them to a loan amount of $450,000, but they wanted to stay under the FNMA limit so they are shopping for lesser houses to stay under the limit. And that has kept them out of some areas. They aren't to happy about being farter away from top schools because of it. They also fell in love with one house, but their you children would be on the bus for over 45 minutes each way. With other people paying more for these houses because of the higher limits...it will probable drive prices up again when the market corrects itself. I have know alot of Realtors that try to lower the price when it is close to the Fannies limits...too qualify more buyers.

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