Increasing Loan Limits Spell Good News for Buyers!
For the second year in a row, the Federal Housing Finance Agency announced it will increase the maximum loan limit for Fannie Mae and Freddie Mac mortgages. The two government agencies will raise the maximum-size loan they can guarantee on a single-family home or condo by 6.8 percent, which almost directly mirrors the recent nationwide increase in home prices. For example, loan limits in lower average priced counties are set to jump from the mid $420k’s to the mid $450k’s, while limits in higher priced counties will see increases from the mid $630k’s to almost $680k. “Higher priced counties” will include places like Santa Barbara and the San Francisco Bay Area. This modest increase in loan limits can make home ownership a much more realistic possibility for thousands of buyers across California, and will allow many more individuals to finance with conventional loans, avoiding the tight underwriting standards and high interest rates of non-conforming or “jumbo loans.”
The California Association of Realtors has publicly commended this action and its potential for prospective homeowners: "C.A.R. applauds the FHFA for recognizing California's continuing home price increases over the last few years and raising maximum conforming loan limits," said C.A.R. President Steve White. "Increasing the existing Fannie Mae and Freddie Mac conforming loan limits will provide stability and certainty to the housing market and give tens of thousands of California home-buyers a chance at home-ownership."
For information on how this effects your situation or local market, feel free to contact S&A today!