Are Bigger FHA Loan Limits Ahead for the Bay Area?

Are Bigger FHA Loan Limits Ahead for the Bay Area?

There’s growing talk in Washington that the FHA loan limit may again be lifted, a way to help buyers and sellers in high-cost communities lacking Jumbo financing.

According to the Bloomberg news service, “President-elect Barack Obama agreed with House Democrats to increase the limit on loans Fannie Mae and Freddie Mac can purchase to $729,750 in high-cost areas, House Financial Services Chairman Barney Frank said.”

The loan limits, which were temporarily raised last year from $417,000 to $729,750, fell to $625,500 on Jan. 1 for the most expensive real estate markets. The limit on so-called conforming loans everywhere else remains at $417,000 in 2009.

The view here is that higher loan limits are a done deal – if the incoming administration and Mr. Frank agree, then the odds are overwhelming that bigger loans will be available in the near future, say within the coming six to 12months.

Whether they will be affordable is a different issue, regardless of what anyone in Washington might think.

For the full story from Bloomberg, please go to Frank Says Obama Backs $729,750Fannie, Freddie Limit

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