As part of the stimulus package passed last week, Congress authorized a temporary increase to conforming loan limits in certain high-cost parts of the country."High cost" is defined by a regions' median sales price.
With the temporary increase, a greater share of Americans can now qualify for Fannie Mae- and Freddie Mac-backed loans, usually the least expensive source for mortgage money.
Higher loan limits can be good for the housing market and the broader economy for two reasons:
Cheaper money can spur new home demand, supporting home values.
Higher loan limits render more homeowners refinance-eligible, freeing up cash for spending, saving, or investing.
The complete county-by-county loan limit list is available on the OFHEO website.
Some examples of the new limits for single family homes include:
San Diego County: $697,500
Riverside County: $500,000
San Bernardino County: $500,000
Orange County: $729,750
Los Angeles County: $729,750
Of the 3,232 U.S. counties, 10 percent are considered "high-cost". Residents of these areas can expect the same low rates offered to the rest of the country, but with a slight premium. Be sure to ask your loan officer about how it works.
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