News from the Feds hot off the press regarding loan limits.

The Federal Housing Finance Authority (FHFA), will announce 2009 conforming loan limits for Fannie Mae and Freddie Mac by November 7.  The limits will define the maximum loan size of mortgages that can be purchased.

Under Housing and Economic Recovery Act of 2008 , (HERA )passed July 2008, the FHFA was directed to set conforming loan limits each year for the nation as well as for high cost areas.  The rules governing how the loan limits are established differ from the rules set forth in the Economic Stimulus Act of 2008, (ESA) which applies to loans originated in 2008.  Under ESA loan limits for high cost areas were set at 125 percent of local house price medians and the maximum high cost limit was 175 percent of the nation conforming limit ($729,750 in the continental US).  Under HERA, the high cost area loan limits are 115 percent of local price medians up to a maximun of 150 percent of the national limit.  In 2009, if the national limit remains at $417,000 for one unit properties, the max limit in high cost areas would be $625,000 for the continental US.

To determine high cost area limits under HERA for 2009, FHFA will use median home values estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD).  The FHA median prices will be calculated in the coming weeks by FHA for the purpose of determining its 2009 loan limits.  Information can be found here.

Tags: Fannie Mae, FHA, FHFA, Freddie Mac, HERA