FHA Loan Limit increased to $729,750
Fannie Mae and Freddie Mac remain at $625,500
On Tuesday, November 15th a deal was reached regarding increasing loan limits. If you've been following the debate, you saw that Fannie Mae and Freddie Mac have become the scapegoat for the mortgage crisis and financial collapse that occurred in 2007 and 2008. Many in Washington believe that it was not Wall Street, but Fannie Mae and Freddie Mac that caused the housing crisis. This is a ridiculous assumption, however, in an election year with a full assault on Fannie Mae and Freddie Mac increasing the conforming loan limit could not pass in Congress and will remain $625,500.
FHA on the other hand has not been a political target and Congress was able to get a compromise deal worked out in which the FHA loan limit would be temporarily increased to $729,750 until December 31, 2013. This will become law on Thursday, November 17, 2011.
On a positive note, although not everything we had hoped for, a $750,000 house will be able to be purchased for about $26,250 plus closing costs instead of $150,000 plus closing costs! It's also an extension with a two year commitment. That should be a huge stimulus for the Real Estate Market which will speed up a recovery to higher prices. In my view it's a "home-run" for Real Estate Professionals!
Fannie Mae and Freddie Mac remain at $625,500
On Tuesday, November 15th a deal was reached regarding increasing loan limits. If you've been following the debate, you saw that Fannie Mae and Freddie Mac have become the scapegoat for the mortgage crisis and financial collapse that occurred in 2007 and 2008. Many in Washington believe that it was not Wall Street, but Fannie Mae and Freddie Mac that caused the housing crisis. This is a ridiculous assumption, however, in an election year with a full assault on Fannie Mae and Freddie Mac increasing the conforming loan limit could not pass in Congress and will remain $625,500.
FHA on the other hand has not been a political target and Congress was able to get a compromise deal worked out in which the FHA loan limit would be temporarily increased to $729,750 until December 31, 2013. This will become law on Thursday, November 17, 2011.
On a positive note, although not everything we had hoped for, a $750,000 house will be able to be purchased for about $26,250 plus closing costs instead of $150,000 plus closing costs! It's also an extension with a two year commitment. That should be a huge stimulus for the Real Estate Market which will speed up a recovery to higher prices. In my view it's a "home-run" for Real Estate Professionals!
