I sent out an update 3 weeks ago explaining how the stimulus package should affect mortgage loan limits. I mentioned in the article that we were waiting on HUD to publish median sales prices for each area so that we could determine the new loan limits. HUD has released the new loan limits and I wanted to get it to you as soon as possible.
DISCLAIMER – PLEASE READ THIS FIRST: Although the new loan limits have been posted for our information, the mortgage investors and servicers are still awaiting publications from FHA, Fannie Mae, Freddie Mac, and Ginnie Mae regarding their special rules for underwriting and securitization of these new loan limits. There will likely be different underwriting guidelines as well as pricing (rates) on these higher loan amounts. Once this information is published it could take a little while for the mortgage investors and servicers to let the industry know what their securitization and pricing rules will be on these higher limits. What this all means is…UNTIL THIS INFORMATION IS RECEIVED FROM THE MORTGAGE SERVICERS AND INVESTORS THESE HIGHER LOAN LIMITS ARE NOT AVAILABLE FOR ORIGINATION by myself or any other lender!!!
Review of the Stimulus Package:
The economic stimulus package passed Congress on February 7, 2008 and was signed into law by the President on February 13, 2008. This new law was effective immediately and includes a temporary increase in both the FHA and conforming loan limits to as high as $729,750 in high cost areas. This means that the interest rates on many mortgages will go down because these loans are now eligible to be purchased by Fannie Mae and Freddie Mac or insured by the Federal Housing Administration (FHA). Previously, the FHA was only allowed to insure loans with balances lower than $200,160 - $362,790, depending on the county where the property was located. Also, Fannie Mae and Freddie Mac were only allowed to purchase loans with balances at or below $417,000. This resulted in limited options and higher financing costs for those with loan balances above these limits. The new law will increase these limits in high cost areas and opens up new options and lower financing costs for many people. The new loan limits are only in affect until December 31, 2008 which means that the old limits will go back into effect after this year.
Here is the official information on how it will affect Lee and Collier Counties
(The data below is for single family homes only – the numbers go up for multi family dwellings)
Lee County (Cape Coral-Fort Myers MSA):
FHA: The current Lee County FHA loan limit is $270,750. The NEW Lee County FHA loan limit will be raised to $356,250!
Conforming: The current conforming loan limit of $417,000 in Lee County will not change.
Collier County (Naples-Marco Island MSA):
FHA: The current Collier County FHA loan limit is $362,790. The NEW Collier County FHA loan limit will be raised to $531,250!
Conforming: The current Collier County conforming loan limit is $417,000. The NEW Collier County conforming loan limit will be raised to $531,250 as well!
If you would like to look up a different market you can go to https://entp.hud.gov/idapp/fhagov/hicostlook.cfm and enter the State and County that you are looking for.
Again, I must give you a disclaimer. I am providing you this information to keep you up to date on the changes and to give you a basic understanding of how this will affect your specific market. Loans cannot be originated on these limits immediately. As I learn more I will send out more updates.
If you should have any questions on the above information please do not hesitate to call my office at (239) 275-7700.
In this constantly changing mortgage market it is my commitment to keep my clients and referral sources up to date on the latest information. It is equally important that you trust a career mortgage professional who is committed, qualified and equipped to give you timely information and expert guidance every step of the way. Is your mortgage partner still in the business? If not, I would like the opportunity to become your trusted advisor!
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