The main news to come out of last Thursday's economic stimulus package announcement by the Bush Administration and House leaders was the tax rebate of massive proportions. But there was another incentive announced: An agreement to temporarily raise the conforming loan limit in areas that have home prices. The Seattle Times reports on the new conforming loan limit:
It would raise loan limits temporarily above $700,000 for the quasi-government entities Fannie Mae and Freddie Mac, which fund the bulk of the nation's mortgages. Until now, these entities couldn't buy and package mortgages larger than $417,000, the so-called conventional-loan limit.
The idea is to help stimulate the ailing housing market by expanding the number of people that would be able to by homes in expensive areas like California, Hawaii and New York, among other high-priced real estate markets.
Will it work? It might. It's a buyer's market right now, and allowing a higher conforming loan limit could lead to the purchase of homes. In the most expensive real estate markets, the average home prices are still above the conforming loan limit.
» Conforming Loan Limit May Not Change from LendingLeaves
Today a debate is raging about whether it is a good idea to increase the conforming loan limit. [Read More]
Tracked on: January 29, 2008 9:25 AM | Permalink to Trackback