2009 Conforming High Cost Loan Limits

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.

Hight Cost Areas To See A Return To 2008 Conforming Loan Limits Of $729,750

Everything old is new again.

Conforming mortgages are limited by loan size, based on "typical" housing costs around the country. The current conforming limit on a single-unit property is $417,000.

In 2008, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increases in "high-cost" areas around the country. In Los Angeles County, for example, a mortgage could be as large as $729,750 and still be considered "conforming".

Those temporary increases rolled back effective January 1, 2009, to a maximum of $625,500.

However, as part of the American Recovery and Reinvestment Act of 2009 signed into law this week, conforming loan limits in high-cost areas have been returned to their elevated levels of 2008.

You can see the text on the bottom of page 111 of 407.

Changes to conforming loan limits impact everyone with a stake in real estate, even if their neighborhoods are not considered "high-cost". This is because conforming mortgages offer the widest selection of home loan products, and often at the lowest rates. The widespread availability of conforming mortgages helps to support home sales nationwide as well as providing ample refinancing options for people that need it.

Lenders have yet to pick up the change, but are expected to shortly. Once they do, more homeowners will be eligible for cheap home financing.

To lookup your neighborhood's conforming loan limits, visit the HUD Web site. Or, if you have specific questions related to your home or an upcoming purchase, contact me directly anytime.

Mortgage Loan Limits Fall In High Cost Cities In 2009 As Scheduled

As part of the Economic Stimulus Acto of 2008, Congress authorized a conforming loan limit increase in "high-cost" areas around the country. Versus the national conforming loan limit of $417,000, for example, a Manhattan home buyer could secure a 2008 mortgage for $725,000 and still be within "conforming" guidelines.

Effective January 1, however, those limits rolled back. Conforming mortgages in the 59 designated high-cost regions are now capped at $625,500. In San Diego, the cap is $546,250.

In non-high-cost areas, the 2009 conforming loan limits remain unchanged from 2008.

1-unit properties : $417,000 San Diego: $546,250
2-unit properties : $533,850 San Diego: $699,300
3-unit properties : $645,300 San Diego: $845,300
4-unit properties : $801,950 San Diego: $1,050,500

Loans in excess of these dollar amounts are often called "jumbo", or "super jumbo" home loans, depending on their size. Jumbo home loans tend to be more costly than their conforming-sized cousins.

New Conventional Loan Limits for San Diego

For the 4th consecutive year, the government has set the conforming mortgage loan size limit at $417,000.

A conforming mortgage is one that, quite literally, conforms to the mortgage guidelines set forth by Fannie Mae or Freddie Mac.

The 2009 loan limits, as released by the government, are:

1-unit properties : $417,000
2-unit properties : $533,850
3-unit properties : $645,300
4-unit properties : $801,950

Loans in excess of conforming loan limits are more commonly called "jumbo", or "super jumbo" home loans, depending on their size.

Out-sized mortgages like these are often more costly than their conforming-mortgage counterparts because jumbo loans are not guaranteed by the U.S. government like Fannie Mae loans are.

There are loan limit exceptions, however.

Left over from the Economic Stimulus Act of 2008, specific, "high-cost" areas around the country have their own conforming loan limits, not to exceed $625,500. There are 59 designated high-cost regions in the U.S., most of which are in California. In San Diego, the loan limit has been lowered from $697,500 to $546,250 in response to the decrease in home prices over the last year.

Loan limits are re-assigned each year, based on "typical" housing costs around the country.

Since 1980, as home prices have increased, so have conforming loan limits. As home prices have fallen in recent years nationwide, however, the conforming loan limit has not.

Loan Limits Set to Decrease in Certain High-Cost Areas

Conforming mortgages are limited by loan size, based on "typical" housing costs around the country. Since 1980, as home prices have increased, so have conforming loan limits.

The current conforming loan limit on a single-unit property is $417,000.

Earlier this year, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limit increases in "high-cost" areas around the country. In Los Angeles County, for example, a mortgage can be as large as $729,750 and still be considered "conforming". In San Diego County it's $697,500.

But beginning in 2009, those increases roll-back. Effective January 1, conforming mortgages in high-cost areas will be limited to $625,500.

Changes to conforming loan limits impact everyone with a stake in real estate, even if their neighborhoods are not considered "high-cost". This is because conforming mortgages offer the widest selection of home loan products, and often at the lowest rates. The widespread availability of conforming mortgages helps to support home sales nationwide ands provide ample refinancing options for homeowners that need it.

Starting with the New Year, fewer people will be eligible.

If you have specific questions related to your home or an upcoming purchase, contact me directly anytime.