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Conforming and FHA Loan Limits Increased
The Office of Federal Housing Enterprise Oversight (OFHEO) on March 6 released the Fannie Mae-Freddie Mac maximum conforming loan limits that will be in effect through year-end as a result of the economic stimulus legislation signed into law last month by President Bush.
Seventy-one Metropolitan and Micropolitan Statistical Areas are affected, including 224 counties and cities not in counties. In addition, there are 21 counties outside of those areas where the limits have been increased, plus Guam and four municipalities in the Marianas Islands.
The newly increased limits range from $417,500 in Greeley, Colo. to the highest of $793,750 in Honolulu.
In the continental U.S., $729,750 is the maximum limit for a single-family home. The conforming loan limit has been set that high in eight markets in California, including Los Angeles and San Francisco. Three smaller markets in Colorado; two in Massachusetts; Key West, Fla.; Washington, D.C.; New York City and Salt Lake City also saw their limits raised to the maximum.
Fannie Mae subsequently announced that it will begin purchasing fixed-rate mortgages at the higher limits effective April 1, and do the same for ARMs starting on May 1. Freddie Mac has not yet announced its effective dates.
In a related development, the Department of Housing and Urban Development on March 5 raised the loan limits for homes insured by the Federal Housing Administration in 14 counties in California. The action was taken after Congress passed its economic stimulus package last month, which includes a temporary increase through year-end on FHA-backed loans, from $362,790 to as high as $729,750. In prepared remarks, HUD Secretary Alphonso Jackson said the new limits will make FHA-backed loans available to as many as 30,000 Californians and 250,000 home owners nationwide.
The following day, HUD announced that it raised the limits in other counties across the nation as well. Overall, the change in loan limits will help provide economic stability to America's communities and give nearly 240,000 additional home owners and home buyers a safer, more affordable mortgage alternative, HUD said in announcing the new loan limits.
For more on FHA loan limits in your home area, click here. For additional information, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8597.
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 Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
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