HUD, OFHEO Release New Conforming Loan Limits

MBA (3/7/2008 ) MBA Staff
HUD and the Office of Federal Housing Enterprise Oversight yesterday released new maximum conforming loan limits for the Federal Housing Administration, Fannie Mae and Freddie Mac that will be in effect through year-end as a result of the Economic Stimulus Act of 2008.
The maximum for temporary jumbo conforming loan limits, which apply to loans originated between July 1, 2007 and December 31, 2008, are as high as $729,750 for one-unit homes in the continental United States. Two-, three- and four-unit homes have higher limits, as do homes in Alaska, Hawaii, Guam and the Virgin Islands.

The economic stimulus legislation, passed last month, permitted FHA, Fannie Mae and Freddie Mac to raise their conforming loan limits in certain high-cost areas. The new jumbo limits are a function of median home prices as estimated by HUD.

OFHEO provided two sources showing the new loan limits. OFHEO’s Web site, www.ofheo.gov/media/hpi/AREA_LIST.pdf, reports only those counties and Metropolitan Statistical Areas (MSAs) that are affected by the new loan limits. Data for all areas are available at HUD’s Web site, https://entp.hud.gov/idapp/html/hicostlook.cfm.

The changes directly affect loan limits in 71 Metropolitan and Micropolitan Statistical Areas, including 224 counties and cities not in counties. In addition, 21 counties outside of Metropolitan or Micropolitan areas that show increases, plus Guam and four municipalities in the Marianas Islands. The newly increased limits range from $417,500 in Greeley, Colo., to $793,750 in Honolulu, Hawaii.

The Mortgage Bankers Association supported temporary loan limit increases in the economic stimulus bill, saying it would help consumers by increasing the mortgage financing options and help restart the securitization market for higher cost housing markets such as California and parts of New England and New York.