Saturday, November 8th, 2008 at 10:22 AM
Lower Loan Limits
It doesn’t seem like that big of a deal, but the ’super-conforming’ loan limit of $697,500 will be reduced to $546,250 in 2009.
The short time that they were available didn’t spoil us - we hardly knew ya!
Here is the story from the U-T:
http://www.signonsandiego.com/news/business/20081108-9999-1b8loans.html
I know that 30-year jumbo rates are still advertised in the 9+ range on places like Wells Fargo’s website, but there are plenty of lenders funding jumbos around 8.0% and under - including WFB. You have to check with the specific loan reps to get the scoop.
Posted on Saturday, November 8th, 2008 at 10:22 AM in Interest Rates/Loan Limits | 5 Comments » | 
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I’m just guessing that the lower loan limits are just going to help with the squish down process on all the inventory priced from 600-900k.
Mark | November 8th, 2008 at 11:58 amI just looked at realist and it looks like 2946 sales were made since April with loan amounts about $546,250, If you downloaded that subset and looked at the first loan amount over $546,250 you’d get a better feel for how many loans this could affect. The issues with the above conforming limit loans is the additional downpayment requirements, more stringent underwriting and the higher interest rate charged for those loans.
® | November 8th, 2008 at 12:42 pm$682,812. That’s the magic number to stay conforming with 20% down.
This should be the benchmark number. If a home costs more than this it better offer more than the classic cookie-cutter, no-back-yard, neighbors’- bedroom-windows-looking-into-each-other tract home disasters that seem to be flooding the market.
The Blur | November 8th, 2008 at 4:17 pmAs far as I understand, the same lower limit applies to FHA as well.
How many transactions in San Diego were funded by FHA loans between 546k and 697k? Compared to the total number of high-end transactions?
The 546k limit is not final. There’s a possibility to appeal. If you want home prices to come down further, this is an excellent opportunity for you. Go to FHFA web site, read up about the appeals process, contact them as a responsible taxpayer and make an argument that 546k is unreasonably high. The limit is supposed to be set to 115% of county median. 546,250 is 115% of 475,000. There’s no way our median is anywhere near 475k. 375k is more like it.
SD Scientist | November 8th, 2008 at 7:00 pmThis is what I had been saying. Lowering the “conforming jumbo” limits by roughly $150k cannot be rosy for the upper-middle income category. Nor is it good news that you can — if lucky — get a non-conforming jumbo for 8+ % (when the Fed is dropping money from helicopters at 1%). How many people (other than possibly the readers of this blog) have managed to save 20% down AND not get blown away by the markets? Yes, there is equity in homes, but again that has declined and will decline further. Deflation is discouraging, isn’t it…
Rational expectations | November 8th, 2008 at 7:51 pm