Fannie, Freddie, FHA loan limits going up?
"An overhaul of the Federal Housing Administration’s mortgage insurance program and an increase in the size of loans that mortgage finance giants Fannie Mae and Freddie Mac may purchase will be part of the economic stimulus package, leaders said Thursday.
The changes will allow FHA and the big government-sponsored enterprises to help save some at-risk homeowners from defaulting as their adjustable rate mortgages reset to much higher rates. It should also help spur home purchases in high-cost areas of the country such as California, New York, Connecticut and Massachusetts."
"The new limits for FHA and the GSEs will be 125 percent of the median area home price, capped at $730,000 in the country’s costliest housing markets — much higher than the administration previously supported.
"The current $417,000 conforming loan limit for Fannie Mae and Freddie Mac has made it harder and more expensive for those in high-cost markets to obtain “jumbo” loans, because the secondary market shuns mortgages not backed by the GSEs. The current FHA limit of $362,000 is also far below the amounts that many borrowers need."
Also from the AP:
"To address the mortgage crisis, the package also raises the limits on Federal Housing Administration loans and home mortgages that Fannie Mae and Freddie Mac can purchase to as high as $725,000 in high-cost areas. Those are considerable boosts over the current FHA limit of $362,000 and the $417,000 cap for Fannie Mae and Freddie Mac's loan purchases."