CONGRESS REINSTATES & EXTENDS (EXPIRED)
CONFORMING LOAN LIMIT FOR FHA LOANS THROUGH 2013
On Tuesday, Nov. 15, 2011,Congress voted to increase the maximum size of mortgage loans that are insured by the Federal Housing Administration (FHA), back up to $729,750 through Dec. 31, 2013. The extension applies to high-cost areas including all of Los Angeles and Orange County.
The FHA's loan limits dropped at the end of September of this year for mortgages insured by the FHA, as well as the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. The higher conforming loan limit was temporarily raised during the early stages of the nation’s economic crisis to help steady a struggling housing market, but then dropped back to $625,500 on Oct. 1.
For now, Fannie Mae and Freddie Mac insured mortgages – which back funding for roughly half of all home loans nationwide -- will remain at $625,000.
“This is encouraging news for Home Buyers,” said Elaine Mallon, Broker Associate with Coldwell Banker. “FHA loans require a lower down payment, and conforming loans have lower interest rates than jumbo loans. Restoring the $727,750 limit allows the home buyers’ investment dollar to go further by raising the size of a more affordable home loan. Additionally, almost every transaction that could have closed as a Fannie or Freddie loan can now close as an FHA loan.”
“Home Sellers can also be encouraged that efforts are continuing to mend a struggling housing market, to stabilize housing values and that the market is opening up to millions of credit-worthy home borrowers,” said Mallon.
Rep. Brad Sherman (D-CA) adds, “Higher FHA loan limits are critical to supporting current housing prices and our overall economic recovery, and it doesn’t cost the federal government a dime. This is the single most important provision in the minibus bill to prevent a collapse of housing prices in high-cost areas like Los Angeles.”
Home prices and mortgage interest rates won’t stay this low forever. If you are ready to MAKE YOUR MOVE NOW, call Elaine directly at (310) 544-8453 or on the web at www.CaliforniaMoves.com/Elaine.Mallon. She is eager to help with all your HOME BUYING & SELLING needs!
Elaine Mallon, who operates as a Dual Agent for Coldwell Banker's Palos Verdes / South Bay AND the state-of-the-art Manhattan Beach branch offices, is a Certified Negotiator, a Certified Relocation Specialist, a Certified Palos Verdes Peninsula Area Specialist, an award-winning marketing and public relations veteran, and a regular contributor to local and national on-line publications on matters that affect Buyers & Sellers today.