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New FHA & Conforming Loan Limits Announced
The new, temporary FHA and Conforming Loan Limits for 2008 were announced today by the Office of Federal Housing Enterprise Oversight (OFHEO). For the Sacramento Metropolitan Statistical Area (MSA), the new loan limit for single family homes is $580,000, a substantial increase over the current conforming loan limit of $417,000 and the current FHA loan limit of $362,790. You dont live in Sacramento? Check your area here.
Weird Math
This a nice surprise! I was pretty sure that with a median price in the low $300k range as reported by DataQuick and NAR, the new limit wouldnt offer Sacramento home owners much relief. But heres the part that was not apparent in the language of the bill. This is from the OFHEO list:
the maximum temporary loan limit is calculated as 1.25 times the median house price for the highest priced county in the propertys metropolitan or micropolitan area
Ah! That makes a big difference.
The Final Puzzle Piece
So the last piece of the puzzle fits into place when we learn how the lenders will price the jumbo conforming loans. FHA says there will be no premium charged for the higher-than-normal FHA loan limits, but Freddie Mac has already declared that the new conforming loans will be segregated into different pools based on the increased risk of early payoffs.
Stayed tuned for that pricing, but lets get your jumbo loan dialed in and ready to go. Rates are on the upswing, and we may not see rates fall any further.