We have all been waiting for some relief to our current market conditions, and it has arrived. The new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.
The new loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750.
The impact of these new loan limits is expected to increase the housing market significantly because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages.
NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market.
An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.
HUD was mandated in the Economic Stimulus Act to publish new loan limits within 30 days of the bill's signing by President Bush on February 13. NAR strongly supported this economic stimulus package because of the relief they felt it would bring our members.
NEW FHA / FANNIE MAE 2008 LIMITS
County 1 Unit 2 Units 3 Units 4 Units
Bergen $729,750 $934,200 $1,129,250 $1,403,400
Essex $729,750 $934,200 $1,129,250 $1,403,400
Hudson $729,750 $934,200 $1,129,250 $1,403,400
Morris $729,750 $934,200 $1,129,250 $1,403,400
Passaic $729,750 $934,200 $1,129,250 $1,403,400
Union $729,750 $934,200 $1,129,250
$1,403,400
Jose R. Cordova
Broker/Owner
CENTURY21 Casa Real Latino
973-546-8888
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