Congresswoman Says Higher Conforming Limits to be Part of Stimulus

January 8, 2009 No Comments »


San Jose Congresswoman Zoe Lofgren said the return of higher conforming loan limits will be a part of the new stimulus bill floating around Washington.

On January 1, the high cost conforming limit fell from $729,750 to $625,500 in some of the most expensive areas of the country, making it more difficult for certain homeowners to take advantage of the record-low interest rates available at the moment.

Speaking from her office on Capitol Hill, Lofgren noted that the change wasn’t official, but did come from trusted sources.

She added that the new stimulus package isn’t expected to be passed by January 20 when Obama takes office, but does anticipate an expeditious passage.

I noted earlier this week that the jumbo loan to conforming loan spread was 1.83 percent, up from 1.37 percent a week ago and 0.23 percent last year.

Currently at Wells Fargo, a jumbo 30-year fixed-rate mortgage is pricing at 8.00 percent, while a similar conforming mortgage is advertised at 4.75 percent, which obviously can make or break a potential homeowner and those looking to refinance.

The National Association of Home Builders is also reportedly in Washington pushing a $150 billion plan to prop up the ailing housing market, according to the AP.

Builders are apparently looking for subsidies that would lower mortgage rates to below three percent, as well as a tax credit of up to $22,000 for new home purchases.

The National Association of Realtors is pushing for a more reasonable $7,500 tax credit for all home purchases.

What about lowering prices?

Read more: How much house can I afford?

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