For areas of the country such as San Francisco, or Boston which have experienced a huge jump in home sales for October, the $625k loan limit comes in handy.
Chicago, IL (PRWEB) November 28, 2013
The Federal Savings Bank echoes an announcement made on November 26th by the Federal Housing Finance Agency loan (FHFA) that limits by government-sponsored enterprises Fannie Mae and Freddie Mac will not be reduced next year.
Conforming loan limits backed by Fannie Mae and Freddie Mac was raised to $417,000 for most areas of the U.S. in 2008 as a result of the housing crisis. For areas like New York City and Los Angeles, where home prices and the cost of living are higher than the national average, the conforming loan limit is $625,500.
“This is great news for home buyers as they need to have some wiggle room when it comes to buying an expensive home” says Nick, a banker at The Federal Savings Bank. He continues “For areas of the country such as San Francisco, or Boston which experienced a huge jump in home sales for October, the $625k limit comes in handy.”
Fannie Mae and Freddie Mac were seized under government control in 2008 and now guarantee about two-thirds of all mortgages. In an effort to push borrowers back into the private market, the FHFA proposed reducing loan limits.
However, after several real estate groups, including the National Association of Realtors and the Mortgage Bankers Association, protested the changes, the FHFA has decided to keep the current lending standards. The industry groups argued that the changes would stall the recovery of the real estate market, as it would be harder for borrowers to get qualified and approved for a home loan. The changes could impact first-time home buyers the most, as they are less likely to be pre-qualified under current lending practices.
Over the summer the FHFA announced it would not reduce loan limits without a six-month warning, meaning borrowers will be able to find the same low-cost mortgages heading into 2014. The announcement isn't likely to encourage more home sales or mortgage activity, but could prevent a decline in the housing market.
The Federal Savings Bank reminds first-time home buyers that another government agency has also made things easier for mortgage applicants. The Consumer Financial Protection Bureau recently announced on November 20th that it will enforce a new standard of simplified mortgage documents in 2015. Nick states “The government is obviously taking an interest in keeping its policy current regarding real estate sales and the mortgage process.”
Contact the Federal Savings Bank, a veteran owned bank, to explore how the bank can help with obtaining a low rate home loan.