FNMA & Freddie Mac have both restricted the maximum loan-to-value and combined loan-to-value ratios for properties located within a declining market to five (5) percentage points less than the maximum permitted for the selected mortgage product.
Please see FNMA Announcement 07-22 dated Dec. 5, 2007 and Freddie Mac Bulletin dated Nov. 15, 2007 for more detailed information.
Please see the attached PDF chart for refinance transactions 3Q 2007 House Price Index Report
Please visit this link for purchase transactions » 3Q 2007 Purchase-Only Indexes for Each State (TXT)
I spoke with the OFHEO office, and they explained to me how to read the purchase chart. Basically, you’ll see the quarter number (1,2,3, or 4) and if the market declined between quarter 3 and quarter 4 for 2007, then this state will be part of the declining areas as mentioned by FNMA & Freddie Mac
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