The new economic stimulus package passed by Congress at the end of last week offers a number of new provisions, including the much-talked-about tax rebate, business tax incentives and additional rebates to military veterans and the elderly. And one of the more exciting provisions for those who want to buy a home in more expensive markets is the new FHA lending limits. Forbes reports on the FHA lending limits:
The bill also temporarily allows the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac to buy individual home loans worth up to $729,750, up from the current limit of $417,000. The Federal Housing Administration would be allowed to insure loans as high as $729,750 as well.
This means that in higher-priced markets like Seattle, New York, California, and tourist destinations like Apsen and Sedona, could see a boost in the real estate market. Higher FHA lending limits make homes more attractive, since they can be federally backed.
While this may help stimulate some flagging real estate markets, the long-term effects on the US economy are less likely to be felt long-term. The emphasis continues to be on continued spending and increasing the ability of Americans to get into more debt. This in turn adds instability to the economy, creating long-term difficulties, no matter the short-term "fix."
I think it is going to be a while until California sees a boost in its real estate market. This little stimulus package will not have much impact on the thousands of home owners who can not afford their home...only time will tell.
Posted by: Sell My House | March 21, 2008 2:07 PM | Permalink to Comment