New Conforming Rate

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Email: info@Georgechestnut.com

New Conforming Mortgage Limit Extended Through Fiscal Year 2011

On September 30, 2010, President Obama signed a resolution that included a provison extending through fiscal year 2011 the current conforming loan limit of $729,750 for high-cost areas, including many in California. The same limits will also be extended to loans insured by the Federal Housing Adminstration.

We're extremely pleased that the Obama adminstration recognizes the need for such an action so that the housing market can recover. Without the extension, which was set to expire at year's end, FHA loan limits would have dropped by as much as 50 percent in some areas, and the conforming loan limit would have dropped by 40 percent.

CALIFORNIA ASSOCIATION OF REALTORS (CAR) and the NATIONAL ASSOCIATION OF REALTORS (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.'s and NAR's efforts, a provision of the Housing Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $417,000 to $729,750 in high-cost areas and extending the limits through 2009. This action effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through Sept. 30, 2011.

Without the extension of the higher loan limits, many California borrowers would have a harder time refinancing homes and obtaining financing for new home purchases. We hope Congress will now focus on making the higher loan limits permanent.

The conforming loan limits determines the maximum size of a mortgage that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or "guarantee." Non-conforming or "jumbo loans" typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.

If you are interested in buying a home, but have additional questions or concerns, complete the form below along with the best time to contact you and we will give you a call. As always, we have your best interest at heart. We have the experience and know-how to assist in the purchase of a home in today's real estate market.

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