According to “anon8mizer”:
CNBC just reported that the [conforming loan limits for Fannie Mae and Freddie Mac] limit has been raised from $417K to $625K…
And from “Dave”:
This proposal (reported on Reuters) has serious legs in Congress. On top of the Fed lowering the boom this week to the tune of 75 basis points, SF may have it’s conforming loan limit increased to $700k. That would mean that someone purchasing an $875K home could put 20% down and get a rate (today) that’s below 6% on a 30 year fixed. That’s somewhere between 1 and 2 percentage points lower than just six months ago. From an affordability perspective, one full percentage point drop on the loan above would translate into a payment that’s lower by about $450/month.
This is (finally) some reasonable bullish news for the Bay Area real estate market… You will see a refinance boomlet in the coming three months (hopefully some foolish ARM-holders will lock into something more responsible) and you could see buyers inch back into the market. Recession or not, this spring is going to be an interesting ride.
We couldn’t agree with you more.
Some quotes from the report:
The loan limit U.S. mortgage funders Fannie Mae and Freddie Mac can finance will be raised to $625,000 from the current $417,000…
…several sources said the final plan might be narrowly tailored to raise the loan level for some high-cost metro areas as high as $700,000. [that would be us]
[Update: Important to note that the proposal is to raise the loan limit "temporarily", and although agreed upon, it is not yet written into law.]