April is upon us and old man Winter is trying to go to sleep. With him, he is taking all of the bad news about the housing market slump in Baltimore and around the country for that matter. The following is an excerpt of an article from the National Association of REALTORS, explaining how the new HUD regulations concerning FHA Loan Limits will impact Real Estate in the U.S.
New HUD Conforming Loan Limits: What This Means for Housing, REALTORS®, and the Economy
WASHINGTON, March 06, 2008 - The U.S. Department of Housing and Urban Development today published new FHA and conforming loan limits, based on median home prices as mandated by the Economic Stimulus Act signed by President Bush in February. 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. NAR expects the impact on the housing market to be significant 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 research points out that increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, 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 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." The following url will verify through the HUD web-site, the exact lending limits in each county of every state for single family dwellings up to 4 dwelling units.
https://entp.hud.gov/idapp/html/hicostlook.cfm
This is terrific news for many people who would have otherwise had to forego a purchase, because the jumbo loan interest rate would have severely hampered their buying power in the price of their new home.