Stimulus DC: Temporary Conforming Loan Caps
It's official. The new (though, temporary) cap for Fannie, Freddie, FHA conforming loans for Washington DC region is $729,750.
The devil is in the details.
1) Window of increase is only temporary. This is the window: Sometime between July 1, 2007 (start date) and December 31, 2008 (closing). Yes, lenders been in the forefront fanning the flame this window of opportunity even before it becomes official. Email from a lender.
However, the July 1, 2007 date has no bearing whatsoever on new refinance transactions! In other words, it doesn't matter when the loan you are refinancing was originated. The old loan could have been originated in 2005, 2006 or anytime before or after July 1, 2007 and it would have no effect whatsoever on your current purchase or refinance transaction. If you are financing a new loan today, whether it is a purchase or refinance transaction, that loan is subject to the new limits set forth in the bill.
2) The increase doesn't universally apply to all jurisdiction of metro DC. You see the formula they use is not that simple. There are details. Like this one: the limit is based on 125% of "Median Home Price." Median home price is when 50% of homes sold above the average, and the other 50% below that price. To make things easier, Bankrate.com has this clickable map to find out what the new loan limit is for your county/ city.
The fine print:
Use this map to find your county and see what the loan limit for your county is. If your county isn't listed, the FHA loan limit remains unchanged, and the conforming limit remains $417,000. If your county is listed, and the dollar figure is less than $417,000, that figure is the new FHA loan limit; the conforming limit remains $417,000. If the dollar figure is higher than $417,000, then that's both the FHA and conforming limit for that county.
Very interesting article.
Posted by: mortgage broker/s | Tuesday, 20 January 2009 at 01:31 AM