PRESIDENT SIGNS HISTORIC HOUSING BILL

By
Real Estate Agent with Carnevale Real Estate

The legislation will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan.  The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.

 

The bill permanently increases the conforming loan limit to $625,500.  C.A.R. has long advocated for higher conforming loan limits.  In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.

 

Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market.

 

The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area's median home price, up to $625,500.  The new FHA loan limit will be the greater of $271,050 or 115 percent of an area's median home price, up to $625,500.  Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008. 

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