IMPORTANT MESSAGE FOR HOMEOWNERS -- WASHINGTON UPDATE
As part of the economic stimulus package being negotiated by House Democrats and the Treasury Department, Fannie and Freddie loan limits will increased for one year up to $730,000. The increase will be adjusted for local markets at 125% of local median home price. The move will significantly improve liquidity and pricing in the jumbo market. The agreement also includes raising the FHA loan limits to the same amount. We are trying to confirm whether the other provisions of FHA reform will be included (such as lowering downpayment requirements). But at a minimum, the loan limits will be increased.
This represents an agreement in principle and must still go through the legislative process. My best guess is that will happen sometime after the State of the Union next week, likely progressing into early February.
This is the most significant action to date proposed by the federal government to stabilize the housing market and should allow for many people to refinance into a new mortgage loan at todays low interestt rates.