Are you aware that the conforming loan limits put into place by the Economic Stimulus Act of 2008 will be going away soon?

The Federal Finance Agency (FHFA) just announced that starting in 2009 loan limits may change depending on where you live. The new limit will be $417,000 for the majority of the country, high cost real estate areas such as Los Angeles, Burbank, Studio City, Toluca Lake, San Fernando Valley etc. will be capped at $625,000. This is important as the current conforming limit for these areas is $729,750.

Many had been wanting the higher limit to remain as the conforming loan limit determines the maximum size loan that Fannie Mae(FNMA) and Freddie Mac( can buy or guarantee. Additionally non-conforming loans usually offer higher interest rates than then conforming loans.

There is still a strong lobbying effort going on to have Congress make the higher limit permanent, we’ll see what happens.
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