The Department of Housing and Urban Development (HUD) released the new FHA and GSE (Fannie/Freddie) loan limits for 2008, which is great news for current and potential homeowners across the nation.

Authorized by The Economic Stimulus Act of 2008, which was signed into law on February 13, 2008, the new FHA limit is based on 125% increase on each county’s median home price, with a minimum of $271,050 and a maximum of $729,750. The increased Fannie Mae and Freddie Mac loan limits follow the same formula, with a minimum of $417,000 and a maximum of $729,950

Why Should You Care?

For those looking to purchase or refinance real estate in a high cost region, this is great news. These temporary increases could help you avoid the higher interest rates associated with “non-conforming” or “jumbo” loans - which are currently more than a point higher than conforming loans. This means many consumer’s who want to purchase a new home will be able to take advantage of great real estate deals and get more home for less money. In fact many homes that you might not have been able to afford just a few years ago could now be well within your reach, thanks to this temporary program. Remember, with a home insured by FHA, a qualifying borrower’s down payment could be as little as 3%!

These increased loan limits are also good news for those looking to refinance their expensive jumbo loan into a new “conforming” loan. In fact, the only restriction is that these increases only apply until the end of 2008. The legislation, however does not exclude the refinancing of any past mortgages into these new “conforming” loans. That means, if you qualify, you can take advantage of the new loan limits no matter how many years have passed since you obtained your mortgage-as long as you get it done before the end of the year.

Do You Live in a High-Cost Region?

The new loan limits for the entire country can be accessed at HUD’s website. I can help you review and interpret these numbers,

Give Raffie or myself a call. Let’s take 10 minutes and see if you can take advantage of this new bill.

Tags: conforming loans, fannie mae / freddie mac, FHA Guidelines