Has anyone started to hear rumblings from buyers and/ or mortgage reps that they are concerned that FHA

Asked by Andrea J. Mealey, 02481 Tue Aug 5, 2008

limits which have been temporarily raised in some counties are going to fall back down in Jan. 2009? Is there any sense that this is being even considered in your markets or has it not hit the radar yet?

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Other/Just L…, , Fleming Fitch Grant, Holly Hill, FL
Tue Aug 5, 2008
The American Housing Rescue and Foreclosure Prevention Act of 2008 makes the temporary limits on conventional conforming loans (previously set to expire 12/31/08) permanent.

The new limit is 125% of the local median home price and capped at 175% of the national median home price.

FHA limits will be the same - 125% of local median or 175% of national median, whichever is lower.

I expect it will take a couple of weeks at least for HUD to update the loan limits on their web site.

HECMs also have a new limit cap... 132% of the GSE (Fannie/Freddie) limit
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Other/Just L…, , Fleming Fitch Grant, Holly Hill, FL
Tue Aug 5, 2008
I should clarify:

In some markets, the temporary limit (from the 2008 Economic Stimulus Act) was as high as $729,750.

The new maximum, permanent cap will be $625,000. This would definitely pose a problem for the highest priced markets in the country. Since most banks and lenders deliver loans to Fannie Mae/Freddie Mac after 90 days, it would not be surprising to see the new limits imposed by lenders in August with most imposing the new limits by October 1 to meet the 12/21/08 deadline.

All the more reason why buyers considering properites in high-cost markets should get off the fence now.
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