The Economic Stimulus Act of 2008, signed into law by President Bush on February 13, 2008, will allow HUD's Federal Housing Administration (FHA) to temporarily increase its loan limits and insure larger mortgages at a more affordable price in high cost areas of the country.
FHA's old loan Single Family Residence loan limit was $362,790: the new "temporary" FHA SFR loan limit is $567,500.
As well, both Fannie-Mae and Freddie Mac have raised their loan limits. Fannie and Freddie's old $417,000 SFR limit has been raised to $567,500. This Act establishes temporary increases to Fannie Mae's conventioanal loan limits for first lien mortgage loans in high-cost area, as defined by U.S. Department of Housing Development (HUD).
However, it is important to note that while both FHA and Fannie Mae/Freddie Mac loan limits have TEMPORARILY increased, that new tier of loans will likely be re-designated or categorized as FHA "JUMBO" and Conforming "JUMBO" loans and at a higher interest rate than being charged for the previous, smaller loan limits. (Note: there will also be the commonly-known"Non-Conforming" (true) JUMBO loans with higher limits like in the past, but at an even higher rate just like it was before)... I know, it's confusing!
That is, FHA loans at/below $362,790 will have a better rate than loans using the new (Jumbo) and higher "temporary" limit noted above. Too, as I have been told, the same will apply for Fannie/Freddie loans, amounts above $417,000 to $567,500 (Conforming Jumbo) will likely be offered by the banks at a higher interest rate by perhaps an estimated give or take 3/4 pt. rate increase. Above $567,500 is a True Jumbo and an even higher rate. Ouch! A great deal? I wonder? I am not sure if this is much of a "Stimulus Plan" or a lost leader! ... Oh, let us not forget about the Super Jumbo loans (maybe to discuss later?).
In my interpretation, the whole pricing schedule is like categorized into Tier I (Conforming), Tier II (Conforming Jumbo), and Tier III (Traditional Jumbo). And then there is like Tier IV Super Jumbo pricing.
It has been said that the stimulus will provide immediate relief to homeowners and that increasing these loan limits will inject much-needed stability, liquidity, and affordability into the housing market. Let's all hope so!
Now that the administration has taken steps to give relief to the American homeowner and correct the liquidity crisis, perhaps the President will move on to the pressing issue of Global Warming, as noted on You Tube: http://www.youtube.com/watch?v=Q5r6TqpOQGc
Temporary FHA JUMBO Mortgage maximums in the Seatte-Bellevue-Everett, WA areas as of Friday, March 05, 2008:
| MSA Name | MSA Code | Division | County Name | County Code | State | One-Family | Two-Family | Three-Family | Four-Family | Last Revised |
| SEATTLE-BELLEVUE-EVERETT, WA METROPOLITAN DIVISION | 42660 | 42644 | SNOHOMISH | 061 | WA | $567,500 | $726,500 | $878,150 | $1,091,350 | 03/05/2008 |
For more information: Find your FHA regional limits
Temporary FANNIE MAE & FREDDIE MAC "Conforming" JUMBO Loan Limits in the Seatte-Bellevue-Everett, WA areas as of Friday, March 05, 2008:
| MSA Name | MSA Code | Division | County Name | County Code | State | One-Family | Two-Family | Three-Family | Four-Family | Last Revised |
| SEATTLE-BELLEVUE-EVERETT, WA METROPOLITAN DIVISION | 42644 | SNOHOMISH | WA | $567,500 | $726,500 | $878,150 | $1,091,350 | 03/05/2008 |
* Fannie Mae will purchase jumbo-conforming mortgages secured by one-unit properties only.
Greg Rielly, CMP, TEAM Rielly, Mortgage Advisory Group, downtown Everett, WA.
Comments(0)