The Housing and Economic Recovery Act of 2008 raised the maximum conforming loan limit to $729,900 which has been wonderful for buyers in high-cost areas of the country like California. Buyers have been able to take advantage of higher conforming loan limits and have also been able to avoid higher interest jumbo loans. Unfortunately, the high balance conforming loan limit will drop on September 30th to $625,500. After this date, Fannie Mae and Freddie Mac will no longer purchase loans over $625,500. For most buyers, this means they will need to be able to put at least 20% down for loans over $625,500 and the approval process will be more difficult. For sellers, it means their buyer pool will be smaller for homes in the $650,000 to $800,000 range.
How will this change affect you? Are you looking to buy or sell in the next 6 months in this price range?
If you have questions about this change in conforming loan limits and how it may affect you, I encourage you to contact me and the Home Team. We would also love to hear your thoughts on the loan limit drop so please share your comments with us.