The Federal Housing Finance Agency (FHFA) said Friday that it plans to announce the 2009 conforming loan limits for Fannie Mae and Freddie Mac by November 7.
If the national conforming limit remains at $417,000 for one-unit properties in 2009 (which it most likely will), the maximum loan limit in high-cost areas would be $625,500, down from the temporary $729,750 implemented this year.
That could be a major blow to homeowners in areas like California and Florida, where home prices continue to far exceed the conforming loan limit.
And with jumbo loans pricing close to 10 percent, those looking to take advantage of the extended limits could be disappointed next year.
Under the Economic Stimulus Act of 2008, which applies to loans originated this year, the conforming loan limit was temporarily pushed as high as 125 percent of local house price medians and 175 percent of the national conforming limit.
But according to the Housing and Economic Recovery Act of 2008 (HERA) passed in July, high-cost area loan limits will be limited to 115 percent of local price medians and up to a maximum of 150 percent of the national limit.
HERA also stipulates that the conforming loan limit must be at least $417,000 for one unit homes in the continental U.S. and cannot fall from year-to-year, meaning it will probably stay put as it surely can’t rise.