Conforming Loan Limit to Remain at $417,000 for 2008
Forclosure Properties
Office of Federal Housing Enterprise Oversight Director James B. Lockhart announced yesterday that the maximum 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2007 level of $417,000 for one-unit properties for most of the U.S.
The conforming loan limit determines the maximum size of a mortgage that an Enterprise can buy or guarantee. By law the maximum conforming loan limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB). The FHFB reported the decline in the average price was $10,685 or 3.49 percent, from $306,258 in October 2006 to $295,573 in October 2007. The combined two-year decline is now 3.65 percent.
While many in the mortgage industry have felt that this number needs to increase, as the rise in property values in some states has outpaced this limit, the limit will remain the same…even though pricing indicators are showing a decline in values. This is good news for homeowners and mortgage professionals alike as a drop in this limit would make financing even more difficult and more expensive for the end user.
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