New Treats for Buyers-Congress Votes to Extend Higher Loan Limits Through 2010

New Treats for Buyers

By voting to extend the temporarily raised Fannie Mae, Freddie Mac, and FHA loan limits of $729,950 through 2010, Congress gave Buyers (and the U.S. economy which relies heavily on the housing industry) a great big treat. The present loan limits were set to expire at the end of 2009 and revert to previous lower limits of $417,000.

Now buyers are waiting expectantly for one more piece of good news-for the federal $8,000 tax credit to be extended in some form past the current expiration date of Nov. 30, 2009.

Due to extremely high costs of housing throughout Silicon Valley, especially West San Jose, Cupertino and Saratoga, as compared to the rest of the U.S. the good news is especially welcome.

The NATIONAL ASSOCIATION OF REALTORS^® thanked Congress for its speedy action.

"NAR commends both houses of Congress for their quick action in continuing these higher limits during a time for recovery in the housing market and national economy. The higher limits, along with the home buyer tax credit extension, are necessary to keep the markets moving at this critical time," said NAR President Charles McMillan.

"Home sales have shown significant movement upwards in the past six months and reduced inventory in some segments of the housing market, but not in all. Home purchases in the middle-income and higher brackets have not moved much, and those markets must improve before we can experience a fully sustained housing recovery. These higher loan limits will help motivate qualified home buyers to purchase in those markets," McMillan said.

The resolution would extend the present conventional loan limits for Fannie and Freddie through the 2010 calendar year at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000.

The resolution now goes to President Obama, and he is expected to sign it today or Saturday to avoid a government shutdown.