Unfortunately, Californians will not be receiving an increase in Fannie Mae and Freddie Mac loan limits for 2008 (obviously, no one will). From the OFHEO (Office of Federal Housing and Oversight) Press Release Issued on Tuesday, November 27th:
Washington, DC - Office of Federal Housing Enterprise Oversight Director James B. Lockhart today announced the maximum 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2007 level of $417,000 for one-unit properties for most of the U.S. Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit.
The conforming loan limit refers to the maximum amount of a loan that an Enterprise can secure or purchase. It is based upon the October-to-October change in the average home price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB):
The FHFB reported the decline in the average price was $10,685 or 3.49 percent, from $306,258 in October 2006 to $295,573 in October 2007.
“While the house price survey data used in determining the conforming loan limit show a decline over the past year, as previously announced and consistent with the proposed new conforming loan limit guidance, the level will remain at $417,000 for the third straight year,” said Lockhart.
Digging Deeper:
Check out this interview with Fannie Mae President and CEO, Daniel Mudd, in the San Francisco Chronicle, in which he blames overconfidence in the real estate market for the current crisis.
