Earlier this week, the U.S. Department of Housing and Urban Development (HUD) released the new FHA loan limits for California, allowing consumers to calculate the new conforming loan limit for Freddie Mac and Freddie Mae, as part of the initial steps taken since President Bush signed the national economic stimulus package last month.
The multi-faceted stimulus package includes a temporary increase of the conforming loan from $417,000 to as high as $729,750* and a temporary increase of the FHA loan from $362,750 to as high as $729,750* through December 31, 2008.
All told, 14 California counties saw their loan limits for FHA, Fannie Mae and Freddie Mac increased to the $729,750 cap. Most were in the San Francisco Bay Area or other parts of Northern California (Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Cruz and Santa Clara). The Sacramento area saw its loan limits increase to $580,000. Click here to access details on FHA limit increases for all California counties.
So what does this mean for consumers?
This step is designed to provide economic stability to communities in California and give hundreds of thousands of homeowners and homebuyers throughout the country, a safer, more affordable mortgage alternative. Through this increase, consumers may now obtain less expensive loans, thus reducing their monthly payment, improving homeownership affordability and increasing buyers’ purchasing power.
Is it the best time to buy?
According to a CNN article released earlier this week entitled, “Housing: Best time to buy in four years,” “It may be the best time to buy a house in more than four years. Home prices have dropped so quickly and so far that valuations – the difference between what a home should cost and its actual price – are the lowest they’ve been since 2004.”
Though an exciting turn of events for the real estate market, the key to remember is that the higher loan limits are temporary and are expected to expire at the end of 2008.
If you are considering entering the real estate market, “your best opportunity in more than four years” may have arrived. Please call me today so we may see how the increase in loan limits could improve your opportunities in today’s market.
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