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Conforming Loan Limits to Remain Unchanged in 2007
The maximum 2007 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac will remain at the 2006 level of $417,000 for one-unit properties for most of the U.S., the Office of Federal Housing Enterprise Oversight (OFHEO) announced last week.
OFHEO uses the October-to-October percentage increase in the Federal Housing Finance Board's average house price to adjust the maximum conforming loan limits for the subsequent year. That average price declined 0.16% from October 2005 to October 2006. OFHEO said on Nov. 15 that if there was a decrease in home prices, 2007 loan levels would remain unchanged and the amount would be subtracted from any increase in the 2008 limit.
Loam limits for larger properties will also remain at their current levels:
- $533,850 for mortgages on two-family properties
- $645,300 for mortgages on three-family properties
- $801,950 for mortgages on four-family properties
Limits for FHA-insured single-family loans will remain the same in most areas as a result of the Freddie Mac conforming loan limit remaining unchanged. Local limits are based on 95% of area median home prices. However, the limit cannot exceed the ceiling for high-cost areas, which is 87% of the Freddie Mac limit, or be less than the lowest FHA loan limit, or floor, which is 48% of the limit. FHA loan limits can increase in areas that are currently below the high-cost limit if home prices in those areas show an increase.
Based on the 2007 Freddie Mac limit, analysts at NAHB expect the FHA ceiling and floor in 2007 to remain at $326,790 and $200,160, respectively. HUD will officially announce the new FHA levels by the end of this year.
The conforming loan limit can be increased by up to 50% for Alaska, Guam, Hawaii and the Virgin Islands, leaving the Fannie/Freddie limit for these areas at $625,500 for a one-unit property and the FHA ceiling at $544,185.
In addition, the VA’s guarantee is 25% of the conforming loan limit, leaving the maximum, no-downpayment VA-guaranteed loan at $417,000 in 2007.
To search on HUD’s Web site for FHA loan limits by area, click here.
For more information, e-mail Chellie Hamecs at NAHB, or call her at 800-368-5242 x8425; or contact Bill Renner, x8597.
 Want to Know the Long-Term Forecast Through 2015?
Find out in HousingEconomics.com’s Long-Term Forecast.
HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
 NAHB Kit Gives Builders Back-to-Basics Tips in Changing Market
With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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