In about 100 days, the legislation that forced FNMA and Freddie Mac to lend up to $729,750 (in certain markets) will expire to be replaced (as applicable) by High Balance limits.
Let me explain. Traditionally, lenders were able to offer mortgages at favorable terms on loan amounts up to the Conforming loan limits set by FNMA and Freddie Mac. Because FNMA and Freddie Mac stood behind these loans, the rates for the loans were better than other loans available in the marketplace. As a general rule, before the mortgage market imploded in 2008, rates for Jumbo loans were about 1/4% higher than otherwise comparable conforming loans.
After the market implosion, it became very difficult to obtain financing for these larger loans. So, Congress mandated that FNMA and Freddie Mac offer larger loans in higher cost markets. They created two limits: Temporary which expire September 30 and High Balance which will continue in effect.
Property Conforming High Balance Temporary
1 Unit $417,000 $625,500 $729,750
2 Units $533,850 $800,775 $934,200
3 Units $645,300 $967,950 $1,129,250
2 Units $533,850 $800,775 $934,200
3 Units $645,300 $967,950 $1,129,250
4 Units $801,950 $1,202,925 $1,403,400
Importantly, loans with Temporary Loan Limits must close by September 30. Lenders will not be able to grant extensions for these loans beyond that date!
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