Congress Extends Loan Limits for Government funded loans

The Congress recently passed an extension of the increased loan limits passed last year, which increased the limits on the amount of a loan funded or guaranteed by the FHA or Fannie Mae and Freddie Mac in certain high cost areas such as California from the previous $625,500 limit to $729,750. These limits are based on 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The new limits have now been extended through 2010. The higher limits had been set to expire at the end of 2009 returning back to $625,500.

These increases created a new range of loans called "Super Conforming Loans" or " Conforming Jumbos" from $417,000 to $729,750 (in some cases limited to an upper limit of $625,500). These loans are generally priced only an eighth of a point higher than conforming loans under $417,000.

Jumbo loans in excess of these limits are currently available at rates of aprox. one half point higher.

Interest rates for conforming and jumbo conforming loans are now available for rates of less than 5%.