Notes From The Mortgage Insider

On September 30 2011 the temporary “High-Balance Conforming” loan limits expired without any action from Congress to extend them (I know – inaction by Congress is not exactly a surprise). That meant that the maximum “conforming” loan amount was lowered from $729,750 to $625,500. Currently all loans amounts above $625,500 are classified as “jumbo” which means they are ineligible for purchase by Fannie, Freddie or FHA. Which of course means that they cost substantially more in points and rate since they can only be sold in the private capital market, which has yet to fully recover from the 2008 meltdown.

But today there is some good news. We got half a loaf back. Approval was recently granted to FHA to increase their maximum loan amount back to $729,750. Unfortunately Fannie and Freddie, being the red-headed step-children, were not granted equivalent authority. So the new limit applies only to government (FHA) loans and does not apply to conventional loans.

The lenders have already rolled out the higher limits so we are ready right now to take FHA applications up to $729,750.

Happy Holidays!

Margie Hofberg, President, Residential Mortgage Center Inc

To contact Margie Hofberg email her at margie@rmcenter.com. If you wish to be notified when she posts her weekly Newsletter simply click on the Subscribe button below. To be added to her weekly Newsletter email distribution list email Renee Bourassa at renee@rmcenter.com.