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HomeNew Mortgage Loan Limits: When and How Much?

New Mortgage Loan Limits: When and How Much?

On Wednesday the President signed the economic stimulus bill that I wrote about in No Mo' Jumbo? Higher Mortgage Loan Limits from Congress to President. So when do these changes take place? And what will the new home loan limits be?

home pricesWhen? The new loan limits legally became effective when the bill was signed, however the stimulus package gives HUD (Housing and Urban Development) 30 days to publish updated median house prices. HUD intends to publish these within the next two weeks.

How Much: The new loan limits will be 125% of the median house prices for the area...but not to exceed $729,750. Riverside County's last published median house price was $381,400. That would make the loan limits $476,750. If HUD changes the median, will it be higher or lower? Pretty sure it will be lower. The trend is for home prices to decrease (the median price for homes dropped more than 17% over the last year).

Before the act, Conventional home loans were limited to $417,000. FHA loan limits were 95% of the median price for homes.

Stay posted for updates on the median house prices for Riverside County, California (including Hemet, San Jacinto, Murietta, Temecula, Idyllwild, Banning and the surrounding areas).

Joey Aszterbaum is the Hemet Home Loan Guy and a member of the Active Rain social network of real estate professionals. To buy or refinance your home in Hemet, Riverside County, or California visit www.HemetHomeLoans.com or call 951.571.5751

Posted Friday Feb 15
(02/15/08 12:12PM) — Thomas Santore-Westchester-Putnam Real Estate

At 125% of the median sale price will help my area substantially. It will probably go up a minimum of $125,000. This is a much needed boost.  

(02/15/08 12:36PM) — Portland Oregon Real Estate Broker * Jennifer Bukaty *

Hey my Joey! I was just reading this in the NYT. I'm curious to see what they set the new limits at myself. Booking bets?

Congrats on your selection as a gem! I've known it all along :)) 

(02/15/08 12:48PM) — Hemet Home Loan Guy, Joey Aszterbaum

Thomas: That's great news. Unfortunately, 125% in my area is only just over the conforming limits, but with FHA it will make a difference. And there are a lot of first-time buyers and others using FHA mortgage loans right now. Thanks for coming by!

(02/15/08 12:51PM) — Hemet Home Loan Guy, Joey Aszterbaum

JenJen: Thanks. Do you know what the median house price in your area was last year? It could change, but multiplying that by 1.25 will give you a rough guess...but no higher than $729,750 (I forgot to include that in the blog post...so just added it). :)

(02/15/08 02:25PM) — Richard Ives

Thanks for the post Joey.

Have a great day!

(02/15/08 03:55PM) — Hemet Home Loan Guy, Joey Aszterbaum

Richard: Hope it comes in handy for the people buying new homes, and the real estate agents that help them.

(02/15/08 05:38PM) — Adam Waldman - Long Island REALTOR®

JOEY - Thanks for sharing this.  Most reports have led people to believe that the rates are all rising to $729,750.  I'll be on the lookout for your post detailing exactly what is going on.

(02/15/08 06:20PM) — Palm Springs Mortgage Guy - Charles Dismuke

Thanks for the info.  I am in Riverside county too. 

Palm Springs Mortgage Guy, Charles Dismuke

(02/15/08 07:28PM) — Hemet Home Loan Guy, Joey Aszterbaum

Adam: That's so true about the $729,750 figure...People around here were very excited and I'm having to clarify that we're not in a high-cost area and it won't be that much for us. If you learn any more, be sure to stop by and let us know.

Charles: You are most welcome. Good to meet you! Feel free to subscribe and keep in touch.

(02/15/08 09:57PM) — Marchel Peterson Spring TX Real Estate E-Pro ABR

Joey, I always enjoy you keeping up posted on the changes that are so rapidly happening. 

(02/15/08 11:36PM) — Hemet Home Loan Guy, Joey Aszterbaum

Marchel: Thanks. I always enjoy you stopping by and sharing. Come back soon.

(02/16/08 09:43AM) — Jay Beckingham

i'm not getting to excited yet.

will anyone buy them?

(02/16/08 01:35PM) — Hemet Home Loan Guy, Joey Aszterbaum

Jay: Great Comment! You bring up a point that not many outside of the mortgage world understand. A lot of us sell the mortgages we originate on the second market. They don't all go to Fannie and Freddie, but to other large companies that use the same guidelines.

I wonder...if the rules are only going to be changed (as of now) through the end of the year, who is going to want that loan in their portfolio? Wait and see is a good plan.

(02/20/08 11:23AM) — Hemet Home Loan Guy, Joey Aszterbaum

UPDATE: I added a link to Realtor.com's meadian housing prices in the post.

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