Increasing Loan Limits
How Bush May Boost the Economy by Jeanne Sahadi (CNNMONEY.com)
Word is that President Bush may propose new measures to boost the economy by the time he gives his State of the Union address later this month. One of those measures (listed below) sure would help us out in the housing market!
Increasing loan limits: The White House also might consider calling for a temporary increase in the size of mortgages that Fannie Mae (FNM) and Freddie Mac can purchase from mortgage lenders. These two government-sponsored enterprises guarantee the purchase and trading of so-called “conforming” loans, which are those valued at $417,000 or less. Any loans above that amount are considered “jumbo” loans. An increase in the conforming loan limit would make it easier and less costly for borrowers in high-cost areas to get loans because Fannie and Freddie would guarantee their purchase by investors. In the past, the Administration has said it would support a temporary increase in loan limits, but only if lawmakers pass legislation that would boost oversight of both Fannie and Freddie, which have been plagued by accounting scandals.
Let’s keep our fingers crossed that the Jumbo loan limits are increased. I’ll keep you posted on my blog with any updates!
