Despite REALTOR® efforts on a national level, Congress let the temporary increases to FHA and Fannie Mae/Freddie Mac loan limits lapse on October 1. As a result, loan limits have reverted back to pre-February 2008 levels (the date that former President Bush signed the 2008 Economic Stimulus Bill, which temporarily raised the limits).
As a result, loan limits declined in 669 counties in 42 states across the country. The new limits will be equal to 115% of local area median home price (from 125%). The high cost cap will fall from $729,750 to $625,500.
Below are estimates from the National Association of REALTORS® on the decreases affecting Massachusetts buyers. The folks who are most immediately affected are those first time home buyers who qualified under these government and government sponsored loan programs - thus putting another hurdle to entry for these folks. The effects of this anti-stimulus measure cannot be predicted, but I am confident will be felt throughout.
To see loan limit estimates in other states/counties click here
