Loan Limit Extensions Signed into Law

On Nov. 6, 2009 President Obama signed a congressional resolution to extend the current conforming loan limits of $417,000 for most areas in the U.S through 2010 and $729,750 for high-cost areas, including many in California, this is great news for Californians. The present loan limits would expire at the end of 2009 and revert to previous lower limits.

As a result of C.A.R.'s and NAR's efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits, this was first signed into law by President Bush. Last week's actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010. The higher loan limits, along with the home buyer tax credit extension, are great tools to keep this market moving.

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises: Fannie Mae and Freddie Mac, and the Federal Housing Administration (FHA) can buy or "guarantee." Non-conforming loans usually carry higher mortgage interest rates than conforming loans do, which increases monthly payments and tampers with the ability of families in California to purchase homes by making them less affordable. These higher loan limits will help motivate qualified home buyers to purchase in those higher bracket markets.

Hopefully between the move up buyer tax credit and keeping the conforming loan limits higher Santa Clarita's market will still stay moving. Now if we could just get more inventory for all those buyers ready to go things would be grand.